SB127 Alabama 2019 Session

Summary

Primary Sponsor

Shay ShelnuttSenator

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

The bill creates the Future Advance Mortgage Protection Act to ensure a mortgage can secure both current and future loan advances as if they were made when the mortgage was created, with retroactive and prospective application.

What This Bill Does

It adds a new article establishing that future advance mortgages are valid and enforceable for future advances to the same extent as those advances were made at the time of the mortgage's creation. The mortgage is created and its security attaches at execution, regardless of whether any funds have actually been advanced. The act applies to mortgages existing on the effective date and to mortgages created after the act, and it does not change certain priority rules in related security statutes.

Who It Affects

• Borrowers/Homeowners who use future advance mortgages, who would have clearer protection that their mortgage covers both existing and future loan advances.
• Lenders/Creditors who issue future advance mortgages, who would have clearer enforceability and priority for both existing and future advances.

Key Provisions

• Creates Article 6 (Future Advance Mortgage Protection Act) adding sections 35-10-120 to 35-10-124 to Chapter 10 of Title 35.
• Defines FUTURE ADVANCE and FUTURE ADVANCE MORTGAGE.
• Allows a future advance mortgage to secure existing indebtedness and future advances as if advances were made contemporaneously with the mortgage’s creation.
• States a future advance mortgage is created and its security attaches at the time of execution, regardless of actual fund disbursement.
• Applies prospectively to new mortgages and retrospectively to existing mortgages.
• Specifies that the act does not alter certain existing priority rules in Sections 7-9A-334 and 7-9A-604.
• Effective immediately following passage and governor approval.

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