Effect of mortgage modification

Effect of mortgage modification. (a) For a mortgage modification described in subsection (b) of this section: (i) as modified; The mortgage continues to secure the obligation (ii) The priority of the mortgage is not affected by the modification; (iii) The mortgage retains its priority regardless of whether a record of the mortgage modification is recorded; and (iv) The modification is not a novation. (b) Subsection (a) of this section applies to one (1) or more of the following mortgage modifications: (i) obligation; An extension of the maturity date of an (ii) obligation; A decrease in the interest rate of an (iii) If the modification does not result in an increase in the interest rate of an obligation as calculated on the date the modification becomes effective: (A) A change to a different index that is a recognized index if the previous index to which changes in the interest rate were linked is no longer available; (B) A change in the differential between the index and the interest rate; (C) A change from a floating or adjustable rate to a fixed rate; or (D) A change from a fixed rate to a floating or adjustable rate based on a recognized index. (iv) A capitalization of unpaid interest or other unpaid monetary obligation; (v) A forgiveness, forbearance or other reduction of principal, accrued interest or other monetary obligation; (vi) A modification of a requirement for maintaining an escrow or reserve account for payment of an obligation, including taxes and insurance premiums; (vii) A modification of a requirement for acquiring or maintaining insurance; (viii) advance funds; (ix) A modification of an existing condition to A modification of a financial covenant; and (x) A modification of the payment amount or schedule resulting from another modification described in this section. (c) The effect of a mortgage modification not described in subsection (b) of this section is not governed by this act. This act shall not be construed to negate the validity or priority of a mortgage modification not described in subsection (b) of this section.