Do your mortgages in Indiana expressly state the maturity date of the secured obligation? If not, you better take action, quickly — especially for any mortgage loan that has been outstanding for at least 10 years. Earlier this year, the Indiana legislature enacted certain amendments to current Indiana law that may affect the duration of your mortgage liens. The impact of these amendments is to shorten the effectiveness of a mortgage lien on a recorded mortgage from 20 years to 10 years where the mortgage fails to state the maturity date. The amendments take effect July 1, 2012 and will apply to residential and commercial mortgages. Alarmingly, however, the amendments will even apply retroactively to mortgages recorded prior to July 1, 2012 which do not expressly state a maturity date.

Under the new law, if a recorded mortgage fails to state the maturity date, the lien will automatically expire 10 years after the execution date of the mortgage (or if the mortgage does not state the execution date, the date the mortgage was recorded). Furthermore, any existing mortgage which is older than 10 years and fails to state a maturity date will be deemed to expire on July 1, 2012. Although the new law allows a holder of a mortgage to correct this issue by recording an affidavit in the county where the applicable mortgage is recorded, the affidavit must be recorded prior to the later of July 1, 2012 or 10 years following the execution date of the mortgage.

To the extent you have not already done so, if you are a holder or servicer, you should review your Indiana mortgages now to determine if the new Indiana mortgage law has an adverse impact on your existing mortgage liens. It’s better to be safe than sorry. 

By:  Stewart McQueen