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Massachusetts Agencies



In Guleserian v. Fields, 351 Mass. 238, 218 N.E.2d 397 (1966), it was said:

The general rule is that the renewal or extension of an existing senior mortgage and note (or other obligation) secured thereby, without an increase of the principal or interest payable with respect to the secured indebtedness, will not result in any loss of priority of that senior mortgage over junior encumbrances.

The rule was recently cited in East Boston Savings Bank v. Ogan, 428 Mass. 327, 701 N.E.2d 331 (1998), which was a case involving equitable subrogation.

The rule has been slightly modified and broadened by statute. Under G.L.c. 183, §63A it is provided that a mortgage can be modified in the following particulars without losing priority over holders of junior encumbrances:

  1. The term of the loan can be extended.
  2. No additional money shall be loaned, except (a) for taxes and improvements pursuant to G.L.c. 183, §28A or (b) for the payment of delinquent principal and interest on the original indebtedness to the extent that the aggregate amount outstanding at any one time when added to the balance due on the original indebtedness does not exceed the amount originally secured or the sum of the outstanding balance due and three delinquent periodic payments of principal and interest, whichever is greater.
  3. The interest rate of the loan , after any such revision does not exceed the interest rate on the original note.