As previously announced, Delaware recently amended Del. Code Ann. tit. 25, § 2108 by including a new subsection which holds that a mortgage that states that it is “intended to constitute a purchase money mortgage creates a rebuttable presumption that the mortgage is a purchase money mortgage” and, as such, “has preference to and priority over a judgment against the mortgagor or any other lien credited or suffered by the mortgagor” dated before the mortgage, if certain conditions are met.
To afford clients this rebuttable presumption, we will be incorporating “Instructions for FNMA Form 3008”, Authorized Change # 5 into the following, standard security instruments:
- DE Mortgage (Cx316)
- DE Mortgage Second (Cx475)
- HELOC Mortgage – DE (Cx1345)
- FHA DE Mortgage (Cx19365)
When field “Print ‘Purchase Money’ in Security Instrument Doc Title” (FI 48407) equals “Yes”, the title of these instruments will change to “Purchase Money Mortgage” and the following parenthetical sentence will appear immediately right after the legal description:
“(All or part of the purchase price of the Property is paid for with the money loaned.)”
On Cx475, this sentence will be slightly different, since the secured property is not defined (and the proper noun “Property” is not used) until the paragraph after the legal description, in a clause that uses the adverb “hereinafter”. As a result, the sentence will use the common noun “property”. Also, on Cx1345, “Property” will be replaced by the word “Premises”, since this is the term used to reference the secured property throughout the document.
These changes will take effect on November 17, 2020. Questions or concerns about this change may be directed towards Client Support at 1.800.497.3584.