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Text: SF02304                           Text: SF02306
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Senate File 2305

Partial Bill History

Bill Text

PAG LIN
  1  1    Section 1.  Section 654.12B, Code Supplement 1995, is
  1  2 amended to read as follows:
  1  3    654.12B  PRIORITY OF RECORDED PURCHASE MONEY MORTGAGE LIEN.
  1  4    The lien created by a recorded purchase money mortgage
  1  5 shall have priority over and is senior to preexisting
  1  6 judgments against the purchaser and any other right, title,
  1  7 interest, or lien arising either directly or indirectly by,
  1  8 through, or under the purchaser.  A mortgage is a purchase
  1  9 money mortgage if to the extent it is either of the following:
  1 10    1.  Taken or retained by the seller of the real estate to
  1 11 secure all or part of its price, including all costs in
  1 12 connection with the purchase.
  1 13    2.  Taken by a lender who, by making an advance or
  1 14 incurring an obligation, provides funds to enable the
  1 15 purchaser to acquire rights in the real estate, including all
  1 16 costs in connection with the purchase, if the funds are in
  1 17 fact so used.  Except when it is a refinancing of an existing
  1 18 purchase money mortgage between the same lender and purchaser
  1 19 and no new funds are advanced, a mortgage given to secure
  1 20 funds which are used to pay off another mortgage is not a
  1 21 purchase money mortgage.
  1 22    The If more than one purchase money mortgage exists, the
  1 23 first mortgage to be recorded has priority.  In order to be
  1 24 entitled to the rights provided by this section, the mortgage
  1 25 shall must contain a recital that it is a purchase money
  1 26 mortgage in order to provide notice to third parties of its
  1 27 priority.  If there is more than one purchase money mortgage,
  1 28 a prior recorded mortgage has priority unless "the prior
  1 29 recorded mortgage" or "a mortgage recorded earlier" provides
  1 30 otherwise.  However, failure to include the recital in the
  1 31 mortgage shall not prevent a mortgage otherwise qualifying as
  1 32 a purchase money mortgage from being a purchase money mortgage
  1 33 for purposes other than this section.  The rights in this
  1 34 section are in addition to, and the obligations are not in
  1 35 derogation of, all rights provided by common law.
  2  1    Sec. 2.  RETROACTIVE APPLICABILITY.  This Act applies
  2  2 retroactively to purchase money mortgages taken or retained on
  2  3 or after July 1, 1995.  
  2  4                           EXPLANATION
  2  5    This bill provides rights, in addition to those found at
  2  6 common law, for holders of purchase money mortgages.  The bill
  2  7 provides that where more than one purchase money mortgage
  2  8 against a purchaser exists, the first to be recorded has
  2  9 priority.  The bill also provides that the protection afforded
  2 10 through purchase money mortgages is limited to the purchase
  2 11 amount and related costs.  In addition, the bill provides that
  2 12 the failure to provide notice that a mortgage is a purchase
  2 13 money mortgage does not prevent the mortgage from being a
  2 14 purchase money mortgage if it otherwise meets the requirements
  2 15 for a purchase money mortgage.
  2 16    The bill is retroactively applicable to purchase money
  2 17 mortgages taken or retained on or after July 1, 1995.  
  2 18 LSB 3740SV 76
  2 19 mk/cf/24.1
     
Text: SF02304                           Text: SF02306
Text: SF02300 - SF02399                 Text: SF Index
Bills and Amendments: General Index     Bill History: General Index
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