TO MODERNIZE AND ENACT CERTAIN PROVISIONS REGARDING DEEDS OF TRUST, INCLUDING RELEASES, SHORT SALES, FUTURE ADVANCE PROVISION TERMINATIONS AND SATISFACTIONS, TERMINATIONS AND SATISFACTIONS FOR EQUITY LINE LIENS, RELEASE OF ANCILLARY DOCUMENTS, ELIMINATING TRUSTEE OF DEED OF TRUST AS NECESSARY PARTY FOR CERTAIN TRANSACTIONS AND LITIGATION, AND INDEXING OF SUBSEQUENT INSTRUMENTS RELATED THERETO.
Enacts new subsection (c) to GS 45-10, stating that an instrument will be deemed a deed of trust and any substitute trustee will succeed to all rights, titles, authority, and duties of the trustee, if the trustee named in a deed of trust is also the beneficiary named in that deed of trust. Applies to documents recorded before, on, or after October 1, 2011. Makes a conforming change.
Amends GS 45-36.4 (definitions applicable to Article 4: Satisfaction) to add definitions for borrower, credit suspension directive, qualified lien holder, short-pay amount, short-pay statement, and trustee. Clarifies the definitions for entitled person, landowner, and payoff statement. Amends GS 45-36.6, clarifying that if a release is recorded in error or a security instrument is erroneously satisfied of record, then the secured creditor or the person who caused the error may execute and record a document of rescission. The document of rescission either (1) rescinds a release that was recorded in error and deprives the release of any effect, or (2) rescinds the erroneous satisfaction of record of the security instrument and reinstates the security instrument. States that a document of rescission must fulfill four listed requirements. Directs the register of deeds to accept a document of rescission for recording unless one of three specified conditions applies. Sets forth a sample document form for documents of rescission, and specifies that no particular phrasing is required to rescind a release recorded in error or to rescind the erroneous satisfaction of a security instrument. Amends GS 45-36.7, clarifying that an entitled person or agent authorized to request a payoff or short-pay statement may give the secured creditor a notification requesting a payoff statement or a short-pay statement. Adds three items to be included in the notification. Enacts new subsection (e1) to GS 45-36.7, requiring a short-pay statement to include four listed components. Specifies additional details related to short-pay statements and makes conforming changes.
Enacts new GS 45-36.7A, permitting a credit suspension directive to be given to a secured creditor by any of the four listed parties. Requires the credit suspension directive to include described components. Amends GS 45-36.8, clarifying that a secured creditor may send a corrected payoff or short-pay statement if the creditor determines that the payoff amount was understated. Makes conforming changes. Enacts new subsection (a1) to GS 45-36.9 directing the secured creditor to release the property that is the subject of the short-pay statement from the lien of the security instrument if the conditions of the statement are fully satisfied as specified. Makes other clarifying changes.
Enacts new GS 45-36.22, stating that a document is a partial release if it fulfills four specified functions. Directs the register of deeds to accept a partial release for recording unless one of three conditions applies. Provides additional details related to partial releases and sets forth a sample form for partial releases. Applies to documents recorded before, on, or after October 1, 2011.
Enacts new GS 45-36.23, stating that a document is an obligation release if it fulfills four specified functions. Directs the register of deeds to accept an obligation release for recording unless one of three conditions applies. Provides additional details related to obligation releases and sets forth a sample form.
Enacts new GS 45-36.24, setting forth maturity dates if a secured obligation is for the payment of money or if the security obligation is for the performance of some other obligation. Details provisions relating to automatic lien expiration, methods to extend a lien, and lien maturity extension agreements. Permits the lien of a recorded security instrument to be extended by a notice of maturity date, provided the notice is recorded before the lien expires. Details additional considerations related to notices of maturity date. Directs the register of deeds to accept a lien maturity extension agreement or a notice of maturity date for recording and indexing, unless one of three conditions applies. Includes additional provisions for liens of a security instrument.
Amends GS 45-37(b), adding that the lien of any security instrument that secured the payment of money or the performance of any other obligation and that was conclusively presumed to have been fully paid and performed as specified, is conclusively deemed to have expired. GS 45-37(b) applies only to security instruments securing the payment of money or the performance of any other obligation, as described. Makes other clarifying changes. Amends GS 45-37.2 to direct the register of deeds to record and index the seven listed instruments according to GS 161-14.1. Makes conforming changes. Enacts new GS 45-42.3, stating that (1) the expiration of the lien of a security instrument or the satisfaction of a security instrument of record is deemed automatically to release the real property from all ancillary security instruments securing the same obligation, and (2) the recording or a partial release or the recording of a deed or release is deemed automatically to release the real property, as described. Provides exceptions for specified ancillary security instruments and includes applicable definitions.
Enacts new GS 45-45.3 to list the actions that may be taken without the knowledge, consent, or joinder of the trustee in a deed of trust, unless the deed of trust provides otherwise. Specifies that, except in matters relating to the foreclosure of the deed of trust or the exercise of a power of sale, the trustee is neither a necessary nor a proper party to any civil action or proceeding, as detailed. Explains circumstances applicable if a trustee is improperly joined as a party when the statute provides that the trustee is neither a necessary nor proper party. Applies to documents recorded before, on, or after October 1, 2011.
Makes clarifying changes to GS 45-68 (requirements for instruments to secure future advances and future obligations) and GS 45-69 (fluctuation of obligations within maximum amount). Amends GS 45-70 (priority of security instrument) providing for circumstances when the aggregate outstanding principal balance of the obligation or obligations secured by a security instrument exceeds the maximum principal amount that may be secured at any one time. Makes additional clarifying changes related to priority of security instruments. Makes a clarifying change to GS 45-74 (stating that Article 7 is not exclusive). Deletes all provisions of GS 45-81 and replaces with a reorganized list of definitions applicable to Article 9 (instruments to secure equity lines of credit).
Amends GS 45-82, clarifying that an equity line security instrument will, from the time and date of registration, have the same priority as if the advances were made at the time of registration of the equity line security instrument, as specified. States that interest that accrues on the equity line of credit and all payments made, sums advanced, and expenses incurred, as detailed, will be secured by the equity line security instrument and have the same priority, as specified. Makes other conforming and clarifying changes. Amends GS 45-82.1 (concerning the extension of period for advances) to delete the term record owner from the provisions and to provide a new sample form for the Certificate of Extension of Period for Advances under Equity Line of Credit. Makes other clarifying and conforming changes. Enacts new GS 45-82.2 setting forth applicable circumstances when an authorized person requests to terminate an equity line of credit. Sets forth a sample form for requests to terminate an equity line of credit. Requires a title insurance company or an attorney, bank, savings and loan association, savings bank, or credit union providing a request to terminate an equity line of credit to also provide notice to the borrower, as detailed. Enacts new GS 45-82.3, permitting a notice regarding future advances to be submitted to a lender by an authorized person, the property owner, or a qualified lien holder. Provides additional details relating to notices regarding future advances. Sets forth a sample form for the notice regarding future advances. Also requires that notice to the borrower be provided in certain situations. Applies to documents recorded before, on, or after October 1, 2011.
Enacts new GS 45-82.4, stating that no prepayment penalty may be charged with respect to an equity line of credit; makes a conforming change. Makes clarifying changes to GS 45-84. Makes organizational changes to GS 161.14.1 (recording subsequent entries as separate instruments).
Unless otherwise indicated, the act applies to documents recorded on or after October 1, 2011.
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