HB182 Alabama 2019 Session

Summary

Primary Sponsor

Chris BlackshearRepresentative

Republican

Session

Regular Session 2019

Title

Future Advance mortgages, provide that future indebtedness secures when mortgage created, Sec. 35-10-120 to 35-10-124, inclusive, added.

Summary

HB 182 would create the Future Advance Mortgage Protection Act to ensure a mortgage can secure both existing debt and future advances from the moment it is created, protecting its priority.

What This Bill Does

It would make future advance mortgages valid and enforceable for future advances to the same extent as if those advances were made when the mortgage was created. The mortgage is considered created and attached at the time of execution, even if no funds have actually been advanced. The act applies to mortgages created after the act’s effective date and retroactively to existing mortgages, protecting their priority for future advances.

Who It Affects

• Borrowers who use future advance mortgages, by ensuring their loan agreement can cover future draws and maintain priority over other liens.
• Lenders and financial institutions that issue or service future advance mortgages, by providing clearer validity, enforceability, and priority rules.

Key Provisions

• Creates a new Article 6, the Future Advance Mortgage Protection Act, as part of Title 35, Chapter 10.
• Defines Future Advance and Future Advance Mortgage.
• States that a future advance mortgage may secure both existing indebtedness and future advances with the same priority as if the advances were made at the mortgage's creation, and that the mortgage is created at execution.
• Provides that the act applies prospectively to mortgages created after the effective date and retrospectively to mortgages existing on that date.
• Clarifies that this article does not affect certain priority rules in related security contexts (fixtures, crops, and real property security agreements).

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Mortgages