Bill > HB1089

This bill, the Uniform Mortgage Modification Act, establishes a framework for modifying mortgages, which are legal agreements that use real property as collateral to secure a debt or obligation. The act defines key terms like "electronic" and "financial covenant" (a promise related to creditworthiness or security adequacy), and clarifies that a "mortgage" can be any agreement creating a consensual interest in real property for security, regardless of its name, but excludes certain agreements related to condominium or homeowner association dues. It specifies that a "mortgage modification" can include changes to the mortgage itself, the underlying loan agreement, or other security arrangements. The bill applies to most mortgage modifications, with exceptions for changes to the property, obligors, or assignments of the mortgage. Importantly, for specific types of modifications such as extending the loan term, reducing the interest rate, or forgiving principal, the bill states that the original mortgage remains in effect with its original priority, and the modification is not considered a new agreement (novation). It also addresses the interaction with federal electronic signature laws and applies to modifications made on or after its effective date.

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https://leg.colorado.gov/bills/HB26-1089