How to Cross Pledge Existing Mortgage to New Loan

Answered by:

Question:

When you are cross pledging an existing mortgage to a new loan, do you amend the mortgage or prepare a new mortgage? Or do you just reference on the note that the loans are cross pledged?

Answer:

Answer by Randy Carey: That is a question for your legal counsel, as it will be governed under State law.

Answer:

Answer by Richard Insley: If you decide to use them, spreader clauses trigger the right of rescission in certain consumer credit transactions. See the Official Interpretations on Section 1026.23(f).

First published on BankersOnline.com 3/25/13