Has anyone had to increase an existing mortgage? I am wondering how anyone else has handled this? We were doing a Modification of Mortgage but found out that in the hard coded section of the modification it states that "this is an mortgage amendment, as defined in Minnesota Statutes, Section 287.01, subdivision 2, and as such it does not secure a new or an increased amount of debt" and so we can't use that form. I'm thinking we can just do a mortgage and then put a blip on the mortgage stating we are increasing it. Thanks!

I'm not sure if I'm following your question. Are you increasing the mortgage amount? The mortgage term?

It is a construction loan that has some overruns and the note matured so we are going to extend the maturity date and increase the amount of the note and mortgage.

This is "captain" again without logging in.
Our practice is to refi the note because of the new money added and to extend the mortgage. If you have end financing inplace you need ROR.

We used to do an additional note and mortgage for the new amount. After the first one or two times, we asked a real estate attorney to draw up a modification of note and mortgage document that could be altered to fit our needs.

We are using a form from the MBA which amends both the note and mortgage with one agreement. Depending on the changes (material) we will record this also at the county. If you have a MBA Real Estate Manual it is in Chpt 6 Appendix VI.C

Thank you for your insights!

Q: How would you feel if you had the second lien on a property and the first mortgagee filed an increase to their mortgage?

A: Litigious.

I think this is a very bad idea. My personal experience and a legal opinion I read states that if you modify for additional dollars you could be in jepordy ofl losing your priority and becoming (possibly) an unsecured creditor. Furthermore, if you do a seperate additional note you could be in jepordy of allowing someone to "split your financing" and again be forced to act like a junior creditor to mechanics liens.There are reasons that construction is the riskiest loan you can do. If you want some more clarification you can write me back. I have worked with this before. The other thing to remember in construction is that if one mechanics lien gets in, they all get to jump in as a class. If doing a second note and mortgage, the money is well spent to get a junior title policy, besides, pass it on to the customer.
this is my opnion, not necessarily that of my employer.