RS 5390 - Amendment, renewal, or refinancing of mortgage and mortgage note
A. The effectiveness, validity, enforceability, and priority of a conventional mortgage, conventional chattel mortgage, or security agreement are not adversely affected by a change in the terms of the note or notes secured thereby, including but not limited to such changes as an extension of the maturity of the note or notes, an increase or decrease of the interest rate stipulated in the note or notes, or the agreement that the unpaid accrued interest of the note or notes would be converted to principal and thereafter bear interest. It shall not be necessary to amend the mortgage or security agreement to reflect such changes in the terms of the note or notes secured thereby in order to foreclose thereunder through executory process or otherwise. However, if the mortgage or security agreement is amended to reflect such changes, the effectiveness, validity, enforceability, and priority thereof shall not be adversely affected.
B. When the mortgage so provides, a conventional mortgage or conventional chattel mortgage automatically secures payment of a renewal or refinancing note or notes delivered in substitution for the note or notes then secured by the mortgage even though the renewal or refinancing note or notes reflect a change in the terms of such note or notes, including but not limited to such changes as an extension of the maturity of the note or notes, an increase or decrease of the interest rate stipulated in such note or notes, or the fact that the unpaid accrued interest under the note or notes has been converted to principal and will thereafter bear interest, and the effectiveness, validity, enforceability, and priority of the mortgage shall not be affected by the delivery of such renewal or refinancing note or notes. To the extent that the renewal or refinancing note or notes evidence an increase in the secured principal indebtedness (other than the increase that results from the conversion of unpaid accrued interest to principal), the mortgage with respect to the increase in the secured principal indebtedness shall rank from the date of the filing of an amendment to the mortgage reflecting the execution and delivery of such renewal or refinancing note or notes.
Acts 1988, No. 985, §1; Acts 1989, No. 137, §6, eff. June 22, 1989; Acts 2001, No. 541, §1.
{{NOTE: SEE ACTS 1988, NO. 985, §2.}}