Future advances may be secured,how--definitions--requirements--limitations--priorities--terminationprocedure, exceptions.
443.055. 1. As used in this section, the following terms mean:
(1) "Borrower", a person who is a mortgagor, deed of trust grantor, ordebtor of any lender or a successor in interest to any of the personsdescribed in this subdivision;
(2) "Business or agricultural loan transaction", a loan or extension ofcredit or indebtedness of a borrower to a lender, arising under a note,guarantee or other evidence of indebtedness, where the proceeds or benefitsthereof are used primarily for agricultural purposes, or for purposes otherthan personal, family or household purposes;
(3) "Construction loan", a loan:
(a) Which is secured by a security instrument; and
(b) The proceeds of which, by agreement of the borrower and lender, areintended to be used for the construction, alteration, modification or additionof improvements to real property; and
(c) The proceeds of which are disbursed in whole or in part by means offuture advances or future obligations. The term "construction loan" includesloan proceeds used for expenses reasonably related to the construction,alteration, modification or addition of improvements to real propertyincluding governmental fees, taxes, interest, attorneys' and accountants'fees, architects' fees, engineers' fees, utility charges, hook-up or tap-onfees, title insurance, surveys, rents, loan origination or servicing fees, andsimilar expenses;
(4) "Face amount", subject to the provisions of this section, the statedamount of the obligations which may be secured at any given time by thesecurity instrument;
(5) "Future advance", any advance of funds, disbursement of loanproceeds or other exchange of value or consideration from a lender to, or onbehalf of, a borrower that occurs after the date of the security instrumentsecuring such future advance, regardless of whether such advance is made undera note, contract, guarantee or other evidence of indebtedness that wasexecuted prior to or contemporaneously with such security instrument or madeunder a future obligation;
(6) "Future obligation", an obligation or debt of a borrower to a lenderarising under a note, contract, guarantee or other evidence of indebtednessthat was executed or otherwise became effective after the date of theinstrument securing such future obligation, including, without limitation, anynote or agreement that renews, extends, or otherwise modifies an obligation ofa borrower to a lender that is secured by a security instrument under thissection;
(7) "Lender", any mortgagee, deed of trust beneficiary, or creditorholding a security instrument;
(8) "Owner", the owner of the interest in the real property encumberedby the security instrument, not including the trustee, mortgagee, orbeneficiary under a deed of trust;
(9) "Person", a natural person, firm, partnership, association, orcorporation;
(10) "Security instrument", a mortgage, deed of trust, or other realproperty security instrument securing the repayment of any obligation,containing, within the body of the instrument, the provisions described insubsection 2 of this section and containing a provision expressly stating thatthe instrument is to be governed by this section.
2. Security instruments may secure future advances or other futureobligations of a borrower to a lender, whether the advances or obligations areoptional or obligatory with the lender. The future advances or futureobligations may be evidenced by one or more notes, guarantees or otherdocuments evidencing indebtedness of a borrower to lender, which documentsshall not be required to be executed or delivered prior to the date of thesecurity instrument securing them. Neither the existence nor priority of asecurity instrument otherwise complying with the provisions of this sectionshall be adversely affected if at any time on or after the date of suchsecurity instrument there are no obligations then secured by the securityinstrument or the obligations secured by the security instrument are reducedto zero. The fact that a security instrument secures future advances orfuture obligations shall be clearly stated within the body of the securityinstrument, or within the body of any amendment if such amendment is made tocause the original instrument to become a security instrument and securefuture advances or future obligations as provided in this section, and thesecurity instrument shall state the face amount. The total amount ofobligations that may be secured by such a security instrument may decrease orincrease from time to time, but except as to advances made pursuant tosubsection 3 of this section, the total principal amount of the obligationssecured at any given time may not exceed the face amount stated in thesecurity instrument.
3. (1) Future advances made by a lender or future obligations incurredby a borrower for the reasonable protection of the lender's security interestare secured by the security instrument and shall have the priority specifiedin subsection 5 of this section even though the security instrument does notprovide for such future advances or such future obligations, or even thoughsuch future advances or such future obligations cause the total indebtednessto exceed the face amount stated in the security instrument, or even though anotice of termination has been issued pursuant to subsection 6 of thissection. Such advances or obligations may include, but shall not be limitedto, real property taxes, hazard insurance premiums, assessments or maintenancecharges imposed under a condominium declaration or restrictive covenant,subdivision assessments, reasonable repairs and maintenance, amounts due underprior mortgages or deeds of trust, leases, or other encumbrances, andreasonable costs and attorneys' fees incurred in enforcing the securityinstrument or the indebtedness which it secures.
(2) Future advances made or future obligations incurred under aconstruction loan are secured by the security instrument and shall have thepriority specified by subsection 5 of this section even though the futureadvances or future obligations cause the total indebtedness to exceed the faceamount stated in the security instrument, or even though a notice oftermination has been issued pursuant to subsection 6 of this section if thelender complies with paragraph (d) of subdivision (2) of subsection 9 of thissection.
4. The future advances and future obligations which may be secured by asecurity instrument shall be limited to those obligations which arecontractual in nature and those obligations referred to in subsection 3 ofthis section.
5. As to any third party who may acquire or claim any rights in or alien upon the encumbered real property, the priority of the lien of a securityinstrument securing future advances or future obligations shall date from thetime the security instrument is recorded, whether or not any third party hasactual notice of any such advances or obligations and whether or not suchadvances or obligations are optional or obligatory with the lender. If anamendment to a mortgage, deed of trust, or other real property securityinstrument securing the repayment of any obligation has been recorded whichcauses such instrument to become a security instrument or if an amendment to asecurity instrument has been recorded which increases the total amount of theobligations which may be secured thereby, the priority of advances made oradditional obligations incurred thereafter which exceed the original faceamount shall date from the date the amendment was recorded, as to any thirdparties who may acquire any rights in or lien upon the encumbered realproperty, whether or not any third party has actual notice thereof and whetheror not the advances or additional obligations are optional or obligatory withthe lender.
6. At any time subsequent to the execution of a security instrument, theowner at that time may give a notice by sending it certified mail, returnreceipt requested, or by personal delivery (the affidavit of the partypersonally delivering the notice to be prima facie proof of such delivery), tothe lender by sending or delivering it to the lender if such person is anindividual, or otherwise by sending or delivering it to the person specifiedin the security instrument for such purpose, or by sending or delivering toany person on behalf of the lender, upon whom personal service of process maybe served as provided for in section 506.150, RSMo, other than the secretaryof state, and the notice shall state therein that the party sending the noticeis the present owner of the interest in the real property encumbered by thesecurity instrument and that the prior owner elects to terminate the operationof the instrument as security for future advances or future obligations madeor incurred after the date the lender receives the notice. The lender shallbe entitled to rely on a statement received from a party purporting to be thethen owner as a statement received from the proper party unless the statementwas relied upon in bad faith. Within fifteen days of the receipt of such anotice, the lender shall at its own cost record where the original securityinstrument was recorded, a statement referring to the original securityinstrument, legally describing the real property therein, setting forth thefact of the receipt of the notice, stating the date of the receipt of suchnotice, and stating the total principal amount as of the date it received thenotice of all the then outstanding debts and obligations secured by thesecurity instrument. Except as otherwise provided in this section:
(1) No advances made by the lender to the borrower or other obligationsincurred by the borrower to the lender, after the date the lender receives thenotice contemplated in this subsection, shall be secured by the securityinstrument; and
(2) The total debts so secured after receipt of such notice shall belimited in principal amount to the amount stated by the lender in its recordednotice, by which statement the lender shall be irrevocably bound; and
(3) Should the lender fail to file the statement specified in thissubsection within the time period specified, the then owner may file a similarstatement, and the lender shall be irrevocably bound by that party's statementof the total principal amount of the outstanding debts and obligations securedby the security instrument, so long as the statement is made in good faith. Except as to the effect of the statement described in subdivision (3) of thissubsection, with regard to the amount specified in the statement, the lender'sreceipt of such a notice from the prior owner shall not affect the amount orpriority position of advances previously made, or obligations previouslyincurred, or interest thereafter accruing on such obligations or advances. Anylimitation upon the operation of a security instrument to secure futureadvances and future obligations imposed as a result of the notice given inaccordance with this subsection shall not affect the security or priority ofsubsequent advances made or subsequent obligations incurred, as described insubdivision (1) or (3) of subsection 3 of this section, or subdivision (2) ofsubsection 3 of this section if lender complies with paragraph (d) ofsubdivision (2) of subsection 9 of this section, or the right of the lender toseek recourse from the borrower for indebtedness in excess of the amountsecured by the security instrument.
7. A security instrument providing for the securing of future advancesor future obligations, as provided in this section, may secure a guarantee ofother obligations. The priority of the lien of the security instrumentsecuring the guarantee, up to the face amount stated in the securityinstrument, shall be as provided in this section as if the obligationsguaranteed were future obligations.
8. At any time subsequent to the execution of a security instrumentsecuring a guarantee, the owner at that time may give a notice, by sending itcertified mail, return receipt requested, or by personal delivery (theaffidavit of the party personally delivering the notice to be prima facieproof of such delivery) to* the person guaranteed by sending or delivering itto such person if such person is an individual, or otherwise by sending ordelivering it to the person specified in the security instrument for suchpurpose, or by sending or delivering to any person on behalf of the personguaranteed, upon whom personal service of process may be served as provided insection 506.150, RSMo, other than the secretary of state, and the notice shallstate therein that the party sending the notice is the present owner of theinterest in the real property encumbered by the security instrument and thatthe owner at that time elects to terminate the operation of the securityinstrument as security for the guarantee as to debts and obligations made orincurred after the date the person guaranteed receives the notice. The personguaranteed shall be entitled to rely upon a statement received from a partypurporting to be the then owner as a statement received from the proper party,unless the statement was relied upon in bad faith. Within fifteen days of hisreceipt of such a notice, the person guaranteed shall, at his own cost, recordwhere the original security instrument was recorded, a statement referring tothe original security instrument, legally describing the real propertytherein, setting forth the fact of its receipt of the notice, stating the dateof its receipt of such notice, and stating the total principal amount as ofthe date it received the notice of all the then outstanding debts andobligations guaranteed by the guarantee secured by the security instrument.Except as otherwise provided in this section, no guaranteed debts orguaranteed obligations incurred after the date the person guaranteed receivesthe notice contemplated in this subsection shall be secured by the securityinstrument. Except as otherwise provided in this section, the totalguaranteed debts and guaranteed obligations so secured shall be limited inprincipal amount to the amount stated by the person guaranteed in his recordednotice, by which statement the person guaranteed will be irrevocably bound.Should the person guaranteed fail to record the statement specified in thissubsection within the time period specified, the owner at that time may recorda similar statement, and the person guaranteed shall be irrevocably bound bythat party's statement of the total principal amount of the then outstandingguaranteed debts and guaranteed obligations secured by the securityinstrument, so long as the statement is made in good faith. Except as to theeffect of the statement described in this subsection which may be recorded bythe owner at that time with regard to the amount specified therein, thereceipt of such notice from the guarantor by the person guaranteed shall notaffect the amount or priority position of the security instrument for thosedebts or obligations previously incurred, or interest thereafter accruing onsuch obligations or debts which are guaranteed by the guarantee secured by thesecurity instrument. Any limitation upon the operation of a securityinstrument to secure the guarantee imposed as a result of the notice given inaccordance with this subsection shall not affect the security or priority ofsubsequent advances made or obligations thereafter incurred by the personguaranteed pursuant to subdivision (1) or (3) of subsection 3 of this sectionor subdivision (2) of subsection 3 of this section if the lender complies withparagraph (d) of subdivision (2) of subsection 9 of this section, the paymentof which is guaranteed by the guarantee secured by the security instrument, orthe right of the lender to seek recourse from the guarantor for guaranteedindebtedness in excess of the amount secured by the security instrument.
9. (1) Notwithstanding the provisions of subsections 6 and 8 of thissection, if the conditions of subdivision (2) of this subsection arefulfilled, the notice of termination shall be ineffective:
(a) To the extent of the liability of the lender obligated under anirrevocable letter of credit and to the extent the security instrument securesthe repayment of obligations to the lender arising therefrom; or
(b) To the extent of the liability of the guarantor to a personguaranteed and to the extent the guarantee is secured by the securityinstrument, and was given in a business or agricultural loan transaction; or
(c) To the extent that a security instrument secures the liability of athird party in a business or agricultural loan transaction; or
(d) As to those future advances made or future obligations incurred anddescribed in subdivision (2) of subsection 3 of this section after receipt bythe lender or person guaranteed of a notice of termination and relating to theconstruction project existing on the date of receipt of the notice.
(2) For the notice of termination to be ineffective as set forth insubdivision (1) of this subsection, the statement to be recorded by the lendermust contain, in addition to the other information required by subsections 6and 8 of this section, the following:
(a) Notice that the security instrument secures the repayment ofobligations or advances arising from liability under an irrevocable letter ofcredit and the total current amount of such liability, if it secures such aliability; or
(b) Notice that the security instrument secures repayment of obligationsor advances arising from a guarantee given in a business or agricultural loantransaction, if it secures such a liability; or
(c) Notice that the security instrument secures the liability of a thirdparty in a business or agricultural loan transaction, if it secures such aliability; or
(d) Notice that the security instrument secures a construction loan andthe total amount of the loan determined as if the principal amount committedto be advanced, whether or not the lender is obligated to advance all suchamounts, pursuant to a construction loan was fully funded as of the date ofthe receipt of the notice, if it secures such a liability.
(3) Notwithstanding the provisions of subsections 6 and 8 of thissection, no notice of termination shall be effective as to those futureadvances made or future obligations incurred and described in subdivision (1)or (3) of subsection 3 of this section.
(4) Once given, the additional information required by subdivision (2)of this subsection in the statement to be recorded shall be for informationalpurposes only and shall not constitute a limitation on the amount of futureadvances or future obligations secured, or to be secured in the future, underthe security instrument.
10. Any mortgage or deed of trust which does not fall within thedefinition of a security instrument as set forth in subsection 1 of thissection shall be governed as otherwise provided by the laws of this statewithout reference to this section.
11. Nothing contained in this section shall invalidate, or adverselyaffect the priority or validity of, any security instrument duly recordedprior to September 1, 1992. To the extent that such instrument was incompliance with the provisions of this section in effect prior to September 1,1992, it shall continue to be governed by those provisions as if suchprovisions had not been repealed unless an amendment is made to such securityinstrument clearly indicating that the security instrument is to be governedby the provisions of this section in existence after September 1, 1992,whereupon the security instrument shall be governed hereby from and after thedate the amendment is recorded. The fact that such security instrument isamended so as to be governed by this section shall not affect the rights ofthird parties in the encumbered real property existing on the date of therecordation of the amendment.
Future advances may be secured,how--definitions--requirements--limitations--priorities--terminationprocedure, exceptions.
443.055. 1. As used in this section, the following terms mean:
(1) "Borrower", a person who is a mortgagor, deed of trust grantor, ordebtor of any lender or a successor in interest to any of the personsdescribed in this subdivision;
(2) "Business or agricultural loan transaction", a loan or extension ofcredit or indebtedness of a borrower to a lender, arising under a note,guarantee or other evidence of indebtedness, where the proceeds or benefitsthereof are used primarily for agricultural purposes, or for purposes otherthan personal, family or household purposes;
(3) "Construction loan", a loan:
(a) Which is secured by a security instrument; and
(b) The proceeds of which, by agreement of the borrower and lender, areintended to be used for the construction, alteration, modification or additionof improvements to real property; and
(c) The proceeds of which are disbursed in whole or in part by means offuture advances or future obligations. The term "construction loan" includesloan proceeds used for expenses reasonably related to the construction,alteration, modification or addition of improvements to real propertyincluding governmental fees, taxes, interest, attorneys' and accountants'fees, architects' fees, engineers' fees, utility charges, hook-up or tap-onfees, title insurance, surveys, rents, loan origination or servicing fees, andsimilar expenses;
(4) "Face amount", subject to the provisions of this section, the statedamount of the obligations which may be secured at any given time by thesecurity instrument;
(5) "Future advance", any advance of funds, disbursement of loanproceeds or other exchange of value or consideration from a lender to, or onbehalf of, a borrower that occurs after the date of the security instrumentsecuring such future advance, regardless of whether such advance is made undera note, contract, guarantee or other evidence of indebtedness that wasexecuted prior to or contemporaneously with such security instrument or madeunder a future obligation;
(6) "Future obligation", an obligation or debt of a borrower to a lenderarising under a note, contract, guarantee or other evidence of indebtednessthat was executed or otherwise became effective after the date of theinstrument securing such future obligation, including, without limitation, anynote or agreement that renews, extends, or otherwise modifies an obligation ofa borrower to a lender that is secured by a security instrument under thissection;
(7) "Lender", any mortgagee, deed of trust beneficiary, or creditorholding a security instrument;
(8) "Owner", the owner of the interest in the real property encumberedby the security instrument, not including the trustee, mortgagee, orbeneficiary under a deed of trust;
(9) "Person", a natural person, firm, partnership, association, orcorporation;
(10) "Security instrument", a mortgage, deed of trust, or other realproperty security instrument securing the repayment of any obligation,containing, within the body of the instrument, the provisions described insubsection 2 of this section and containing a provision expressly stating thatthe instrument is to be governed by this section.
2. Security instruments may secure future advances or other futureobligations of a borrower to a lender, whether the advances or obligations areoptional or obligatory with the lender. The future advances or futureobligations may be evidenced by one or more notes, guarantees or otherdocuments evidencing indebtedness of a borrower to lender, which documentsshall not be required to be executed or delivered prior to the date of thesecurity instrument securing them. Neither the existence nor priority of asecurity instrument otherwise complying with the provisions of this sectionshall be adversely affected if at any time on or after the date of suchsecurity instrument there are no obligations then secured by the securityinstrument or the obligations secured by the security instrument are reducedto zero. The fact that a security instrument secures future advances orfuture obligations shall be clearly stated within the body of the securityinstrument, or within the body of any amendment if such amendment is made tocause the original instrument to become a security instrument and securefuture advances or future obligations as provided in this section, and thesecurity instrument shall state the face amount. The total amount ofobligations that may be secured by such a security instrument may decrease orincrease from time to time, but except as to advances made pursuant tosubsection 3 of this section, the total principal amount of the obligationssecured at any given time may not exceed the face amount stated in thesecurity instrument.
3. (1) Future advances made by a lender or future obligations incurredby a borrower for the reasonable protection of the lender's security interestare secured by the security instrument and shall have the priority specifiedin subsection 5 of this section even though the security instrument does notprovide for such future advances or such future obligations, or even thoughsuch future advances or such future obligations cause the total indebtednessto exceed the face amount stated in the security instrument, or even though anotice of termination has been issued pursuant to subsection 6 of thissection. Such advances or obligations may include, but shall not be limitedto, real property taxes, hazard insurance premiums, assessments or maintenancecharges imposed under a condominium declaration or restrictive covenant,subdivision assessments, reasonable repairs and maintenance, amounts due underprior mortgages or deeds of trust, leases, or other encumbrances, andreasonable costs and attorneys' fees incurred in enforcing the securityinstrument or the indebtedness which it secures.
(2) Future advances made or future obligations incurred under aconstruction loan are secured by the security instrument and shall have thepriority specified by subsection 5 of this section even though the futureadvances or future obligations cause the total indebtedness to exceed the faceamount stated in the security instrument, or even though a notice oftermination has been issued pursuant to subsection 6 of this section if thelender complies with paragraph (d) of subdivision (2) of subsection 9 of thissection.
4. The future advances and future obligations which may be secured by asecurity instrument shall be limited to those obligations which arecontractual in nature and those obligations referred to in subsection 3 ofthis section.
5. As to any third party who may acquire or claim any rights in or alien upon the encumbered real property, the priority of the lien of a securityinstrument securing future advances or future obligations shall date from thetime the security instrument is recorded, whether or not any third party hasactual notice of any such advances or obligations and whether or not suchadvances or obligations are optional or obligatory with the lender. If anamendment to a mortgage, deed of trust, or other real property securityinstrument securing the repayment of any obligation has been recorded whichcauses such instrument to become a security instrument or if an amendment to asecurity instrument has been recorded which increases the total amount of theobligations which may be secured thereby, the priority of advances made oradditional obligations incurred thereafter which exceed the original faceamount shall date from the date the amendment was recorded, as to any thirdparties who may acquire any rights in or lien upon the encumbered realproperty, whether or not any third party has actual notice thereof and whetheror not the advances or additional obligations are optional or obligatory withthe lender.
6. At any time subsequent to the execution of a security instrument, theowner at that time may give a notice by sending it certified mail, returnreceipt requested, or by personal delivery (the affidavit of the partypersonally delivering the notice to be prima facie proof of such delivery), tothe lender by sending or delivering it to the lender if such person is anindividual, or otherwise by sending or delivering it to the person specifiedin the security instrument for such purpose, or by sending or delivering toany person on behalf of the lender, upon whom personal service of process maybe served as provided for in section 506.150, RSMo, other than the secretaryof state, and the notice shall state therein that the party sending the noticeis the present owner of the interest in the real property encumbered by thesecurity instrument and that the prior owner elects to terminate the operationof the instrument as security for future advances or future obligations madeor incurred after the date the lender receives the notice. The lender shallbe entitled to rely on a statement received from a party purporting to be thethen owner as a statement received from the proper party unless the statementwas relied upon in bad faith. Within fifteen days of the receipt of such anotice, the lender shall at its own cost record where the original securityinstrument was recorded, a statement referring to the original securityinstrument, legally describing the real property therein, setting forth thefact of the receipt of the notice, stating the date of the receipt of suchnotice, and stating the total principal amount as of the date it received thenotice of all the then outstanding debts and obligations secured by thesecurity instrument. Except as otherwise provided in this section:
(1) No advances made by the lender to the borrower or other obligationsincurred by the borrower to the lender, after the date the lender receives thenotice contemplated in this subsection, shall be secured by the securityinstrument; and
(2) The total debts so secured after receipt of such notice shall belimited in principal amount to the amount stated by the lender in its recordednotice, by which statement the lender shall be irrevocably bound; and
(3) Should the lender fail to file the statement specified in thissubsection within the time period specified, the then owner may file a similarstatement, and the lender shall be irrevocably bound by that party's statementof the total principal amount of the outstanding debts and obligations securedby the security instrument, so long as the statement is made in good faith. Except as to the effect of the statement described in subdivision (3) of thissubsection, with regard to the amount specified in the statement, the lender'sreceipt of such a notice from the prior owner shall not affect the amount orpriority position of advances previously made, or obligations previouslyincurred, or interest thereafter accruing on such obligations or advances. Anylimitation upon the operation of a security instrument to secure futureadvances and future obligations imposed as a result of the notice given inaccordance with this subsection shall not affect the security or priority ofsubsequent advances made or subsequent obligations incurred, as described insubdivision (1) or (3) of subsection 3 of this section, or subdivision (2) ofsubsection 3 of this section if lender complies with paragraph (d) ofsubdivision (2) of subsection 9 of this section, or the right of the lender toseek recourse from the borrower for indebtedness in excess of the amountsecured by the security instrument.
7. A security instrument providing for the securing of future advancesor future obligations, as provided in this section, may secure a guarantee ofother obligations. The priority of the lien of the security instrumentsecuring the guarantee, up to the face amount stated in the securityinstrument, shall be as provided in this section as if the obligationsguaranteed were future obligations.
8. At any time subsequent to the execution of a security instrumentsecuring a guarantee, the owner at that time may give a notice, by sending itcertified mail, return receipt requested, or by personal delivery (theaffidavit of the party personally delivering the notice to be prima facieproof of such delivery) to* the person guaranteed by sending or delivering itto such person if such person is an individual, or otherwise by sending ordelivering it to the person specified in the security instrument for suchpurpose, or by sending or delivering to any person on behalf of the personguaranteed, upon whom personal service of process may be served as provided insection 506.150, RSMo, other than the secretary of state, and the notice shallstate therein that the party sending the notice is the present owner of theinterest in the real property encumbered by the security instrument and thatthe owner at that time elects to terminate the operation of the securityinstrument as security for the guarantee as to debts and obligations made orincurred after the date the person guaranteed receives the notice. The personguaranteed shall be entitled to rely upon a statement received from a partypurporting to be the then owner as a statement received from the proper party,unless the statement was relied upon in bad faith. Within fifteen days of hisreceipt of such a notice, the person guaranteed shall, at his own cost, recordwhere the original security instrument was recorded, a statement referring tothe original security instrument, legally describing the real propertytherein, setting forth the fact of its receipt of the notice, stating the dateof its receipt of such notice, and stating the total principal amount as ofthe date it received the notice of all the then outstanding debts andobligations guaranteed by the guarantee secured by the security instrument.Except as otherwise provided in this section, no guaranteed debts orguaranteed obligations incurred after the date the person guaranteed receivesthe notice contemplated in this subsection shall be secured by the securityinstrument. Except as otherwise provided in this section, the totalguaranteed debts and guaranteed obligations so secured shall be limited inprincipal amount to the amount stated by the person guaranteed in his recordednotice, by which statement the person guaranteed will be irrevocably bound.Should the person guaranteed fail to record the statement specified in thissubsection within the time period specified, the owner at that time may recorda similar statement, and the person guaranteed shall be irrevocably bound bythat party's statement of the total principal amount of the then outstandingguaranteed debts and guaranteed obligations secured by the securityinstrument, so long as the statement is made in good faith. Except as to theeffect of the statement described in this subsection which may be recorded bythe owner at that time with regard to the amount specified therein, thereceipt of such notice from the guarantor by the person guaranteed shall notaffect the amount or priority position of the security instrument for thosedebts or obligations previously incurred, or interest thereafter accruing onsuch obligations or debts which are guaranteed by the guarantee secured by thesecurity instrument. Any limitation upon the operation of a securityinstrument to secure the guarantee imposed as a result of the notice given inaccordance with this subsection shall not affect the security or priority ofsubsequent advances made or obligations thereafter incurred by the personguaranteed pursuant to subdivision (1) or (3) of subsection 3 of this sectionor subdivision (2) of subsection 3 of this section if the lender complies withparagraph (d) of subdivision (2) of subsection 9 of this section, the paymentof which is guaranteed by the guarantee secured by the security instrument, orthe right of the lender to seek recourse from the guarantor for guaranteedindebtedness in excess of the amount secured by the security instrument.
9. (1) Notwithstanding the provisions of subsections 6 and 8 of thissection, if the conditions of subdivision (2) of this subsection arefulfilled, the notice of termination shall be ineffective:
(a) To the extent of the liability of the lender obligated under anirrevocable letter of credit and to the extent the security instrument securesthe repayment of obligations to the lender arising therefrom; or
(b) To the extent of the liability of the guarantor to a personguaranteed and to the extent the guarantee is secured by the securityinstrument, and was given in a business or agricultural loan transaction; or
(c) To the extent that a security instrument secures the liability of athird party in a business or agricultural loan transaction; or
(d) As to those future advances made or future obligations incurred anddescribed in subdivision (2) of subsection 3 of this section after receipt bythe lender or person guaranteed of a notice of termination and relating to theconstruction project existing on the date of receipt of the notice.
(2) For the notice of termination to be ineffective as set forth insubdivision (1) of this subsection, the statement to be recorded by the lendermust contain, in addition to the other information required by subsections 6and 8 of this section, the following:
(a) Notice that the security instrument secures the repayment ofobligations or advances arising from liability under an irrevocable letter ofcredit and the total current amount of such liability, if it secures such aliability; or
(b) Notice that the security instrument secures repayment of obligationsor advances arising from a guarantee given in a business or agricultural loantransaction, if it secures such a liability; or
(c) Notice that the security instrument secures the liability of a thirdparty in a business or agricultural loan transaction, if it secures such aliability; or
(d) Notice that the security instrument secures a construction loan andthe total amount of the loan determined as if the principal amount committedto be advanced, whether or not the lender is obligated to advance all suchamounts, pursuant to a construction loan was fully funded as of the date ofthe receipt of the notice, if it secures such a liability.
(3) Notwithstanding the provisions of subsections 6 and 8 of thissection, no notice of termination shall be effective as to those futureadvances made or future obligations incurred and described in subdivision (1)or (3) of subsection 3 of this section.
(4) Once given, the additional information required by subdivision (2)of this subsection in the statement to be recorded shall be for informationalpurposes only and shall not constitute a limitation on the amount of futureadvances or future obligations secured, or to be secured in the future, underthe security instrument.
10. Any mortgage or deed of trust which does not fall within thedefinition of a security instrument as set forth in subsection 1 of thissection shall be governed as otherwise provided by the laws of this statewithout reference to this section.
11. Nothing contained in this section shall invalidate, or adverselyaffect the priority or validity of, any security instrument duly recordedprior to September 1, 1992. To the extent that such instrument was incompliance with the provisions of this section in effect prior to September 1,1992, it shall continue to be governed by those provisions as if suchprovisions had not been repealed unless an amendment is made to such securityinstrument clearly indicating that the security instrument is to be governedby the provisions of this section in existence after September 1, 1992,whereupon the security instrument shall be governed hereby from and after thedate the amendment is recorded. The fact that such security instrument isamended so as to be governed by this section shall not affect the rights ofthird parties in the encumbered real property existing on the date of therecordation of the amendment.
Future advances may be secured,how--definitions--requirements--limitations--priorities--terminationprocedure, exceptions.
443.055. 1. As used in this section, the following terms mean:
(1) "Borrower", a person who is a mortgagor, deed of trust grantor, ordebtor of any lender or a successor in interest to any of the personsdescribed in this subdivision;
(2) "Business or agricultural loan transaction", a loan or extension ofcredit or indebtedness of a borrower to a lender, arising under a note,guarantee or other evidence of indebtedness, where the proceeds or benefitsthereof are used primarily for agricultural purposes, or for purposes otherthan personal, family or household purposes;
(3) "Construction loan", a loan:
(a) Which is secured by a security instrument; and
(b) The proceeds of which, by agreement of the borrower and lender, areintended to be used for the construction, alteration, modification or additionof improvements to real property; and
(c) The proceeds of which are disbursed in whole or in part by means offuture advances or future obligations. The term "construction loan" includesloan proceeds used for expenses reasonably related to the construction,alteration, modification or addition of improvements to real propertyincluding governmental fees, taxes, interest, attorneys' and accountants'fees, architects' fees, engineers' fees, utility charges, hook-up or tap-onfees, title insurance, surveys, rents, loan origination or servicing fees, andsimilar expenses;
(4) "Face amount", subject to the provisions of this section, the statedamount of the obligations which may be secured at any given time by thesecurity instrument;
(5) "Future advance", any advance of funds, disbursement of loanproceeds or other exchange of value or consideration from a lender to, or onbehalf of, a borrower that occurs after the date of the security instrumentsecuring such future advance, regardless of whether such advance is made undera note, contract, guarantee or other evidence of indebtedness that wasexecuted prior to or contemporaneously with such security instrument or madeunder a future obligation;
(6) "Future obligation", an obligation or debt of a borrower to a lenderarising under a note, contract, guarantee or other evidence of indebtednessthat was executed or otherwise became effective after the date of theinstrument securing such future obligation, including, without limitation, anynote or agreement that renews, extends, or otherwise modifies an obligation ofa borrower to a lender that is secured by a security instrument under thissection;
(7) "Lender", any mortgagee, deed of trust beneficiary, or creditorholding a security instrument;
(8) "Owner", the owner of the interest in the real property encumberedby the security instrument, not including the trustee, mortgagee, orbeneficiary under a deed of trust;
(9) "Person", a natural person, firm, partnership, association, orcorporation;
(10) "Security instrument", a mortgage, deed of trust, or other realproperty security instrument securing the repayment of any obligation,containing, within the body of the instrument, the provisions described insubsection 2 of this section and containing a provision expressly stating thatthe instrument is to be governed by this section.
2. Security instruments may secure future advances or other futureobligations of a borrower to a lender, whether the advances or obligations areoptional or obligatory with the lender. The future advances or futureobligations may be evidenced by one or more notes, guarantees or otherdocuments evidencing indebtedness of a borrower to lender, which documentsshall not be required to be executed or delivered prior to the date of thesecurity instrument securing them. Neither the existence nor priority of asecurity instrument otherwise complying with the provisions of this sectionshall be adversely affected if at any time on or after the date of suchsecurity instrument there are no obligations then secured by the securityinstrument or the obligations secured by the security instrument are reducedto zero. The fact that a security instrument secures future advances orfuture obligations shall be clearly stated within the body of the securityinstrument, or within the body of any amendment if such amendment is made tocause the original instrument to become a security instrument and securefuture advances or future obligations as provided in this section, and thesecurity instrument shall state the face amount. The total amount ofobligations that may be secured by such a security instrument may decrease orincrease from time to time, but except as to advances made pursuant tosubsection 3 of this section, the total principal amount of the obligationssecured at any given time may not exceed the face amount stated in thesecurity instrument.
3. (1) Future advances made by a lender or future obligations incurredby a borrower for the reasonable protection of the lender's security interestare secured by the security instrument and shall have the priority specifiedin subsection 5 of this section even though the security instrument does notprovide for such future advances or such future obligations, or even thoughsuch future advances or such future obligations cause the total indebtednessto exceed the face amount stated in the security instrument, or even though anotice of termination has been issued pursuant to subsection 6 of thissection. Such advances or obligations may include, but shall not be limitedto, real property taxes, hazard insurance premiums, assessments or maintenancecharges imposed under a condominium declaration or restrictive covenant,subdivision assessments, reasonable repairs and maintenance, amounts due underprior mortgages or deeds of trust, leases, or other encumbrances, andreasonable costs and attorneys' fees incurred in enforcing the securityinstrument or the indebtedness which it secures.
(2) Future advances made or future obligations incurred under aconstruction loan are secured by the security instrument and shall have thepriority specified by subsection 5 of this section even though the futureadvances or future obligations cause the total indebtedness to exceed the faceamount stated in the security instrument, or even though a notice oftermination has been issued pursuant to subsection 6 of this section if thelender complies with paragraph (d) of subdivision (2) of subsection 9 of thissection.
4. The future advances and future obligations which may be secured by asecurity instrument shall be limited to those obligations which arecontractual in nature and those obligations referred to in subsection 3 ofthis section.
5. As to any third party who may acquire or claim any rights in or alien upon the encumbered real property, the priority of the lien of a securityinstrument securing future advances or future obligations shall date from thetime the security instrument is recorded, whether or not any third party hasactual notice of any such advances or obligations and whether or not suchadvances or obligations are optional or obligatory with the lender. If anamendment to a mortgage, deed of trust, or other real property securityinstrument securing the repayment of any obligation has been recorded whichcauses such instrument to become a security instrument or if an amendment to asecurity instrument has been recorded which increases the total amount of theobligations which may be secured thereby, the priority of advances made oradditional obligations incurred thereafter which exceed the original faceamount shall date from the date the amendment was recorded, as to any thirdparties who may acquire any rights in or lien upon the encumbered realproperty, whether or not any third party has actual notice thereof and whetheror not the advances or additional obligations are optional or obligatory withthe lender.
6. At any time subsequent to the execution of a security instrument, theowner at that time may give a notice by sending it certified mail, returnreceipt requested, or by personal delivery (the affidavit of the partypersonally delivering the notice to be prima facie proof of such delivery), tothe lender by sending or delivering it to the lender if such person is anindividual, or otherwise by sending or delivering it to the person specifiedin the security instrument for such purpose, or by sending or delivering toany person on behalf of the lender, upon whom personal service of process maybe served as provided for in section 506.150, RSMo, other than the secretaryof state, and the notice shall state therein that the party sending the noticeis the present owner of the interest in the real property encumbered by thesecurity instrument and that the prior owner elects to terminate the operationof the instrument as security for future advances or future obligations madeor incurred after the date the lender receives the notice. The lender shallbe entitled to rely on a statement received from a party purporting to be thethen owner as a statement received from the proper party unless the statementwas relied upon in bad faith. Within fifteen days of the receipt of such anotice, the lender shall at its own cost record where the original securityinstrument was recorded, a statement referring to the original securityinstrument, legally describing the real property therein, setting forth thefact of the receipt of the notice, stating the date of the receipt of suchnotice, and stating the total principal amount as of the date it received thenotice of all the then outstanding debts and obligations secured by thesecurity instrument. Except as otherwise provided in this section:
(1) No advances made by the lender to the borrower or other obligationsincurred by the borrower to the lender, after the date the lender receives thenotice contemplated in this subsection, shall be secured by the securityinstrument; and
(2) The total debts so secured after receipt of such notice shall belimited in principal amount to the amount stated by the lender in its recordednotice, by which statement the lender shall be irrevocably bound; and
(3) Should the lender fail to file the statement specified in thissubsection within the time period specified, the then owner may file a similarstatement, and the lender shall be irrevocably bound by that party's statementof the total principal amount of the outstanding debts and obligations securedby the security instrument, so long as the statement is made in good faith. Except as to the effect of the statement described in subdivision (3) of thissubsection, with regard to the amount specified in the statement, the lender'sreceipt of such a notice from the prior owner shall not affect the amount orpriority position of advances previously made, or obligations previouslyincurred, or interest thereafter accruing on such obligations or advances. Anylimitation upon the operation of a security instrument to secure futureadvances and future obligations imposed as a result of the notice given inaccordance with this subsection shall not affect the security or priority ofsubsequent advances made or subsequent obligations incurred, as described insubdivision (1) or (3) of subsection 3 of this section, or subdivision (2) ofsubsection 3 of this section if lender complies with paragraph (d) ofsubdivision (2) of subsection 9 of this section, or the right of the lender toseek recourse from the borrower for indebtedness in excess of the amountsecured by the security instrument.
7. A security instrument providing for the securing of future advancesor future obligations, as provided in this section, may secure a guarantee ofother obligations. The priority of the lien of the security instrumentsecuring the guarantee, up to the face amount stated in the securityinstrument, shall be as provided in this section as if the obligationsguaranteed were future obligations.
8. At any time subsequent to the execution of a security instrumentsecuring a guarantee, the owner at that time may give a notice, by sending itcertified mail, return receipt requested, or by personal delivery (theaffidavit of the party personally delivering the notice to be prima facieproof of such delivery) to* the person guaranteed by sending or delivering itto such person if such person is an individual, or otherwise by sending ordelivering it to the person specified in the security instrument for suchpurpose, or by sending or delivering to any person on behalf of the personguaranteed, upon whom personal service of process may be served as provided insection 506.150, RSMo, other than the secretary of state, and the notice shallstate therein that the party sending the notice is the present owner of theinterest in the real property encumbered by the security instrument and thatthe owner at that time elects to terminate the operation of the securityinstrument as security for the guarantee as to debts and obligations made orincurred after the date the person guaranteed receives the notice. The personguaranteed shall be entitled to rely upon a statement received from a partypurporting to be the then owner as a statement received from the proper party,unless the statement was relied upon in bad faith. Within fifteen days of hisreceipt of such a notice, the person guaranteed shall, at his own cost, recordwhere the original security instrument was recorded, a statement referring tothe original security instrument, legally describing the real propertytherein, setting forth the fact of its receipt of the notice, stating the dateof its receipt of such notice, and stating the total principal amount as ofthe date it received the notice of all the then outstanding debts andobligations guaranteed by the guarantee secured by the security instrument.Except as otherwise provided in this section, no guaranteed debts orguaranteed obligations incurred after the date the person guaranteed receivesthe notice contemplated in this subsection shall be secured by the securityinstrument. Except as otherwise provided in this section, the totalguaranteed debts and guaranteed obligations so secured shall be limited inprincipal amount to the amount stated by the person guaranteed in his recordednotice, by which statement the person guaranteed will be irrevocably bound.Should the person guaranteed fail to record the statement specified in thissubsection within the time period specified, the owner at that time may recorda similar statement, and the person guaranteed shall be irrevocably bound bythat party's statement of the total principal amount of the then outstandingguaranteed debts and guaranteed obligations secured by the securityinstrument, so long as the statement is made in good faith. Except as to theeffect of the statement described in this subsection which may be recorded bythe owner at that time with regard to the amount specified therein, thereceipt of such notice from the guarantor by the person guaranteed shall notaffect the amount or priority position of the security instrument for thosedebts or obligations previously incurred, or interest thereafter accruing onsuch obligations or debts which are guaranteed by the guarantee secured by thesecurity instrument. Any limitation upon the operation of a securityinstrument to secure the guarantee imposed as a result of the notice given inaccordance with this subsection shall not affect the security or priority ofsubsequent advances made or obligations thereafter incurred by the personguaranteed pursuant to subdivision (1) or (3) of subsection 3 of this sectionor subdivision (2) of subsection 3 of this section if the lender complies withparagraph (d) of subdivision (2) of subsection 9 of this section, the paymentof which is guaranteed by the guarantee secured by the security instrument, orthe right of the lender to seek recourse from the guarantor for guaranteedindebtedness in excess of the amount secured by the security instrument.
9. (1) Notwithstanding the provisions of subsections 6 and 8 of thissection, if the conditions of subdivision (2) of this subsection arefulfilled, the notice of termination shall be ineffective:
(a) To the extent of the liability of the lender obligated under anirrevocable letter of credit and to the extent the security instrument securesthe repayment of obligations to the lender arising therefrom; or
(b) To the extent of the liability of the guarantor to a personguaranteed and to the extent the guarantee is secured by the securityinstrument, and was given in a business or agricultural loan transaction; or
(c) To the extent that a security instrument secures the liability of athird party in a business or agricultural loan transaction; or
(d) As to those future advances made or future obligations incurred anddescribed in subdivision (2) of subsection 3 of this section after receipt bythe lender or person guaranteed of a notice of termination and relating to theconstruction project existing on the date of receipt of the notice.
(2) For the notice of termination to be ineffective as set forth insubdivision (1) of this subsection, the statement to be recorded by the lendermust contain, in addition to the other information required by subsections 6and 8 of this section, the following:
(a) Notice that the security instrument secures the repayment ofobligations or advances arising from liability under an irrevocable letter ofcredit and the total current amount of such liability, if it secures such aliability; or
(b) Notice that the security instrument secures repayment of obligationsor advances arising from a guarantee given in a business or agricultural loantransaction, if it secures such a liability; or
(c) Notice that the security instrument secures the liability of a thirdparty in a business or agricultural loan transaction, if it secures such aliability; or
(d) Notice that the security instrument secures a construction loan andthe total amount of the loan determined as if the principal amount committedto be advanced, whether or not the lender is obligated to advance all suchamounts, pursuant to a construction loan was fully funded as of the date ofthe receipt of the notice, if it secures such a liability.
(3) Notwithstanding the provisions of subsections 6 and 8 of thissection, no notice of termination shall be effective as to those futureadvances made or future obligations incurred and described in subdivision (1)or (3) of subsection 3 of this section.
(4) Once given, the additional information required by subdivision (2)of this subsection in the statement to be recorded shall be for informationalpurposes only and shall not constitute a limitation on the amount of futureadvances or future obligations secured, or to be secured in the future, underthe security instrument.
10. Any mortgage or deed of trust which does not fall within thedefinition of a security instrument as set forth in subsection 1 of thissection shall be governed as otherwise provided by the laws of this statewithout reference to this section.
11. Nothing contained in this section shall invalidate, or adverselyaffect the priority or validity of, any security instrument duly recordedprior to September 1, 1992. To the extent that such instrument was incompliance with the provisions of this section in effect prior to September 1,1992, it shall continue to be governed by those provisions as if suchprovisions had not been repealed unless an amendment is made to such securityinstrument clearly indicating that the security instrument is to be governedby the provisions of this section in existence after September 1, 1992,whereupon the security instrument shall be governed hereby from and after thedate the amendment is recorded. The fact that such security instrument isamended so as to be governed by this section shall not affect the rights ofthird parties in the encumbered real property existing on the date of therecordation of the amendment.
