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#100306 - 07/24/03 02:46 PM maximum lien amount in mortgages
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
Is there a NJ statute that requires, in a commercial mortgage, that we state a maximum lien amount. For example, in the Laser Pro product we are using for small business loans, for a $200,000 loan with a $200,000 mortgage, the following is included:

"MAXIMUM LIEN: The lien of this Mortgage shall not exceed at any one time the principal amount of $400,000.00 plus accrued interest, payments made by the lender for taxes and insurance, and any other payments made by Lender as provided in this Mortgage."

Laser Pro says they use 2x the mortgage amount to encompass additional expenditures that may be paid by the lender, but then the language says those things are in addition to the $400,000 that is already double the loan amount. This makes no sense to me and I was not aware that a statement like this was required in a commercial mortgage.

Can anyone shed any light on this?
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#100307 - 08/29/03 01:38 PM Re: maximum lien amount in mortgages
Anonymous
Unregistered

I've never seen anything like that and I review loan documentation. I'd ask them to remove that section completely. You're better off not referencing a limit, but referencing only the note date and amount, such as "this mortgage is given to secure a loan of same date in the amount of________"

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#100308 - 11/04/03 07:53 PM Re: maximum lien amount in mortgages
Anonymous
Unregistered

I am also a user of LaserPro and have the EXACT question as you. I was hoping someone out there might know.

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