Notwithstanding the limitations specified in any mortgage, or imposed by a borrower by means of serving and recording a notice of limitation:

(1) Any increase in the principal balance of an indebtedness secured by any mortgage as a result of negative amortization or deferred interest;

Terms Used In Tennessee Code 47-28-109

  • Amortization: Paying off a loan by regular installments.
  • Credit limit: means the maximum amount of principal indebtedness which may be outstanding at any one time under a revolving credit agreement. See Tennessee Code 47-28-101
  • Creditor: includes a state or national bank, a state or federal savings and loan association, a savings bank, a registrant under the Industrial Loan and Thrift Companies Act, compiled in title 45, chapter 5, a state or federal credit union, or any other individual, partnership, trust, corporation, or other legal entity permitted or authorized to enter into credit transactions secured by a mortgage. See Tennessee Code 47-28-101
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Mortgage: includes a mortgage, deed of trust, or other conveyance of real property securing obligations, except instruments creating or perfecting a security interest in fixtures which do not include other real property. See Tennessee Code 47-28-101
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Open-end mortgage: means a mortgage securing an open-end credit agreement. See Tennessee Code 47-28-101
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
(2) Any advance which the creditor is obligated under the terms of the mortgage or related agreement or undertaking to make to a third party, or any disbursement made by a creditor pursuant to the terms of the mortgage to protect the efficacy of the creditor’s security, including, without limitation, payment of taxes, insurance premiums, or expenses incurred in making repairs to the property or in the collection of the debt or the enforcement of the mortgage;
(3) Any advance made under a construction or home improvement loan agreement contained or referred to in the mortgage; and
(4) Interest on such advances or disbursements,

shall be secured by the mortgage, even though the mortgage does not specifically provide for future advances, or the advances or disbursements cause the amount of the total indebtedness to exceed the principal amounts stated in the mortgage, or to exceed the credit limit under an open-end mortgage. The priority of the lien of the mortgage, including any advance, increase, or disbursement described in this section, shall be the same as if such advance, increase or disbursement was made on the date of the recordation of the mortgage.

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