I. INTRODUCTION
Neb.Rev.Stat. § 76-239 once provided, in part, that any mortgage or real estate contract that has been recorded would cease to be notice of the existence and lien of such mortgage or contract as to subsequent encumbrancers and purchasers for value, 10 years after the date of maturity of the secured debt as ascertainable from the record, and if such date of maturity cannot be ascertained from the record, then after the expiration of 20 years from the date of such mortgage or contract. The statute further provided that such a mortgage or contract would be conclusively presumed to have been fully paid and discharged.
Effective September 4, 2005, state law was amended to specifically extend the coverage of the above cited statutory provisions: to include trust deeds; and to extend from 20 to 30 years from the date of a mortgage, contract or trust deed, the time period before which a mortgage, real estate contract or deed of trust ceases to be notice of the existence and lien of such mortgage, contract or deed of trust as to subsequent encumbrancers and purchasers for value in cases in which the date of maturity cannot be ascertained from the record.
II. APPLICATION OF “CURATIVE” STATUTE
Neb.Rev.Stat. § 76-239, commonly referred to as a “curative” statute, establishes an artificial termination date for mortgages, contract or deeds of trust for purposes of “clearing” title in the event that a lender were to go out of business, thus leaving no one to release a lien that continues to appear of record. Lenders should be aware of applicability of this statute if long-term customers utilize mortgages or trust deeds to serve as collateral for long-term credit needs.
To understand the application of the statute, consider a financial institution that makes a loan on July 1, 2005, secured by a trust deed. The loan is payable in installments with a final due date of June 1, 2015, with the due date or “maturity” date of June 1, 2015, reflected on the trust deed. Under Neb.Rev.Stat. § 76-239, since the “maturity” date is contained within the trust deed, the lien represented by the trust deed would terminate by operation of law on May 30, 2025 (10 years following the stated date of maturity). If the same loan had been secured by a trust deed that did not contain the “maturity” date, the lien represented by the trust deed would automatically expire by operation of law on June 30, 2035 (30 years from the date of inception of the deed of trust), unless an affidavit or extension agreement is filed of record in a timely fashion, as described below.
III. AFFIDAVIT OF CONTINUING LIEN
Neb.Rev.Stat. § 76-239 authorizes the owner and holder of a mortgage, contract or trust deed, prior to termination of the record, to file with the Register of Deeds an affidavit to the effect that the mortgage, contract or trust deed is unpaid and is still a valid and subsisting lien. In such case, the lien of such mortgage, contract or trust deed would continue to exist for an additional period of 10 years from the date of filing the affidavit. Alternatively, the owner and holder of the mortgage or contract may file for record with the Register of Deeds a duly executed written extension agreement which is deemed to constitute valid notice of the existence of the lien for an additional 10 year period from the maturity of the trust deed, mortgage or contract as shown by the recorded extension agreement
IV. CONCLUSION
Following this article is a sample “affidavit” that financial institutions may want to consider in extending the effectiveness of a lien that might otherwise terminate through the operation of the provisions of Neb.Rev.Stat. § 76-239.
SAMPLE AFFIDAVIT