I work at a Community Bank in Louisiana and we have started to make some loans out of state. We just completed a construction loan for a commercial customer and now they want to term out the debt. My question is, during the construction phase we retained a "Construction Mortgage" and now with terming it out i need to know if we can still use the construction mortgage or if we need to get a regular mortgage? Any help would be very much appreciated.

Thanks,

I am not sure what the format of a "Construction Mortgage" might be in Alabama, as there is no such promulgated form. If you are lending out of State, who is the attorney that is assisting you in the preparation of those documents. It probably would be a question for them. If you do not have one, then I suggest you make sure that you are not violating Alabama's Unauthorized Practice of Law provisions. I did not look them up and in some States, you cannot prepare your own mortgage documents without legal counsel review.

ok, thank you for the information.

Randy, agree with everything you said.

One of the main document software providers uses the form Construction [Mortgage or Deed of Trust] for their document titles in some states when the purpose of the loan is to finance construction on the RE. It contains an additional section that references UCC 9 (9-334 (h) Priority of construction mortgage).

I'm not sure if this is the case in Alabama or not, as my experience is limited to the west coast.