Sec. 49-31b. Information in deed sufficient notice as to nature and amount of obligation. Deed for variable rate mortgage loan.
283 words·~1 min read·
/ct/title-49/chapter-846-mortgages/49-31b·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)A mortgage deed given to secure payment of a promissory note, which furnishes information from which there can be determined the date, principal amount and maximum term of the note, shall be deemed to give sufficient notice of the nature and amount of the obligation to constitute a valid lien securing payment of all sums owed under the terms of such note.
(b)With regard to a mortgage deed given to secure payment of a promissory note which contains a provision expressly providing that the interest rate set forth in the note may vary one or more times during the life of the note and that such changes in rate may cause the term of the note to change, the “maximum term” shall be adequately disclosed if the mortgage deed furnishes information from which can be determined:
(1)A statement that the interest rate is subject to variation,
(2)the conditions under which such rate may vary,
(3)the manner, including changes in payment amounts, number of scheduled periodic payments, or change in the amount due at maturity, in which any increase and decrease in the rate may be effected, and
(4)the date, if applicable, by which according to the terms of the note, remaining amounts of principal and interest, if any, shall be due and payable in full, regardless of changes in the interest rate. The mortgagee shall give written notice of any change in the interest rate to a second or subsequent encumbrancer, provided such encumbrancer has given written notice by registered mail, return receipt requested, of its encumbrance to the mortgagee. The provisions of this section shall not invalidate any mortgage which would be valid without this section.