HB182 Summary

• Creates the Future Advance Mortgage Protection Act to clarify that future advance mortgages are valid and enforceable from the time of execution, regardless of when loan proceeds are actually advanced.

• Establishes that a mortgage securing future advances has the same priority and enforceability as if those advances were made at the time the mortgage was created.

• Defines "future advance" as any advance, extension of credit, indebtedness, or loan made after the mortgage's creation, whether obligatory or optional.

• Applies both prospectively to mortgages created after the effective date and retrospectively to mortgages already in existence, addressing a recent Alabama Supreme Court opinion that questioned the priority of recorded but unadvanced mortgages.

• Becomes effective immediately upon passage and approval by the Governor.