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Issue 3 Article 4
Amendments To Equity Line Statutes
Ed Urban, Vice President and State Legal Counsel
Senate Bill 408 becomes effective October 1, 1995.
G.S. 45-81(a)(1) has been amended effective October 1, 1995 to change the 15 year period to 30 years.
G.S. 45-82.1 has been added effective October 1, 1995.
G.S. 45-82.1(a) states that the period for advances in G.S. 45-81(a)(1) may be extended by written agreement between the lender and borrower executed before termination of the equity line of credit or the borrowers obligation to repay any outstanding indebtedness. Any extended period shall not exceed 30 years from the end of the preceding period for advances. It should be noted that, apparently, there is no limitation on the number of extensions.
G.S. 45-82.1(b) states that an instrument to which the lender and borrower have agreed to an extended period for advances shall have priority with respect to advances made after the preceding loan period from a date "not later than the date of registration of the certificate described in" G.S. 45-82.1(c).
G.S. 45-82.1(c) states that the priority in G.S. 45-82.1(b) shall apply only if the grantor of the instrument securing the obligation and "other record owners" of the real property conveyed in the instrument execute a certificate evidencing the extension and register the certificate in the office of the register of deeds where the original instrument is registered. The failure of any record owner to execute the certificate shall affect only that record owners interest in the property and executions by other owners shall have full effect to the extent of their interests in the property. "Record owner" is defined by G.S. 45-82.1(c) to mean "any person owning a present or future interest of record in the real property which would be affected by the lien of the mortgage or deed of trust, but does not mean the trustee in a deed of trust or the owner or holder of a mortgage, deed of trust, mechanics or materialmens lien, or any other lien or security interest in the real property."
G.S. 45-82.1(d) states that any certificate complying with G.S. 45-82.1(c) is satisfactory. G.S. 45-82.1(d) sets forth a new form as follows:
"Certificate of Extension of Period for Advances Under Home Equity Line of Credit
Please take notice that the borrower and lender under the home equity line of credit secured by the (deed of trust) (mortgage) recorded on __________ in Book ___, at Page ___, records of this County, have agreed to extend the period within which the borrower may request advances as set forth in G.S. 45-82.1. The borrowers obligations to repay advances and related undertakings are secured by the (deed of trust) (mortgage).
WITNESS the signatures and seals of the undersigned, this ___ day of _______, ____.
(Other record owner(s))
(Mortgagee or Beneficiary)
(Acknowledgment as required by law)."