Massachusetts General Laws ch. 183 sec. 28B – Open-end mortgage; subsequent loans from mortgagee
Section 28B. Any sum which shall be lent by the mortgagee to the mortgagor at any time after the recording of an open-end mortgage that secures such sum shall be equally secured with and have the same priority as would any such sum disbursed as of the time of the recording of such mortgage. As used in this section an open-end mortgage shall mean a mortgage of real estate the terms of which provide that it secures a sum lent by the mortgagee to the mortgagor from time to time pursuant to an open-end credit plan as defined in section 1 of chapter 140D, but the interest rate on any such loan and any delinquency charge thereon on any payment not paid in full within 15 days of its due date shall be governed by section 114B of chapter 140. In the event of any conflict between this section and chapter two hundred and fifty-four or any other provision of law, the provisions of this section shall control. Notwithstanding the foregoing, the priority afforded under this section shall apply only to (i) the principal sum so loaned, provided, however, that in the case of an open-end mortgage recorded after the effective date of this section, such priority shall apply only to so much of such principal sum as does not exceed the amount specified in such mortgage as the maximum sum intended to be secured thereby; (ii) interest on the principal amount to which such priority applies; and (iii) all charges and fees other than principal and interest that are secured by such mortgage. In the event that an open-end mortgage is amended to increase the amount intended to be secured thereby, such mortgage shall be deemed to have been recorded, with respect only to the amount of such increase, at the time such amendment is recorded.
Terms Used In Massachusetts General Laws ch. 183 sec. 28B
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
- Open-end credit: A credit agreement (typically a credit card) that allows a customer to borrow against a preapproved credit line when purchasing goods and services. The borrower is only billed for the amount that is actually borrowed plus any interest due. (Also called a charge account or revolving credit.) Source: OCC
At any time after the termination of the authority of all persons to borrow sums pursuant to an open-end credit plan secured by an open-end mortgage, the holder of such mortgage shall, within ten business days of the request of any person with an interest in the mortgaged real estate, furnish to such person an executed and acknowledged written notice stating that such authority has terminated and stating the amount of the loans secured by such mortgage that remain outstanding on the date of such notice, which notice may be recorded.