SB127 Alabama 2019 Session

Sponsors

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.

Description

<p class="bill_description"> Under current law, a future advance mortgage, which is created upon its execution, may secure funds advanced at the time the mortgage is executed as well as funds advanced in the future. A recent Alabama Supreme Court opinion held that a future advance mortgage, although recorded, is not created until the lender advances funds under the loan secured by the mortgage, thus potentially eliminating the priority a future advance mortgage has over subsequently recorded mortgages or liens</p><p class="bill_description"> This bill would create the Future Advance Mortgage Protection Act</p><p class="bill_description"> This bill would clarify that a mortgage may secure not only existing indebtedness but also future advances to the same extent as if the future advances were made at the same time the mortgage was created</p><p class="bill_description"> This bill would also provide that this bill would apply prospectively to mortgages created in the future, as well as retrospectively to existing mortgages</p><p class="bill_entitled_an_act"> Relating to future advance mortgages; to add a new Article 6, commencing with Section 35-10-120, to Chapter 10 of Title 35 of the Code of Alabama 1975; to establish the Future Advance Mortgage Protection Act; to provide that future advance mortgages are valid and enforceable; and to provide that this article shall apply prospectively to mortgages created in the future and retrospectively to existing mortgages. </p>

Subjects

Mortgages