(a) For a mortgage modification described in subsection (b) of this section: (i) The mortgage continues to secure the obligation as modified; (ii) The priority of the mortgage is not affected by the modification; (iii) The mortgage retains its priority regardless of whether a record of the mortgage modification is recorded; and (iv) The modification is not a novation. (b) Subsection (a) of this section applies to one (1) or more of the following mortgage modifications: (i) An extension of the maturity date of an obligation; (ii) A decrease in the interest rate of an obligation; (iii) If the modification does not result in an increase in the interest rate of an obligation as calculated on the date the modification becomes effective: (A) A change to a different index that is a recognized index if the previous index to which changes in the interest rate were linked is no longer available; (B) A change in the differential between the index and the interest rate; (C) A change from a floating or adjustable rate to a fixed rate; or (D) A change from a fixed rate to a floating or adjustable rate based on a recognized index. (iv) A capitalization of unpaid interest or other unpaid monetary obligation; (v) A forgiveness, forbearance or other reduction of principal, accrued interest or other monetary obligation; (vi) A modification of a requirement for maintaining an escrow or reserve account for payment of an obligation, including taxes and insurance premiums; (vii) A modification of a requirement for acquiring or maintaining insurance; (viii) A modification of an existing condition to advance funds; (ix) A modification of a financial covenant; and (x) A modification of the payment amount or schedule resulting from another modification described in this section. (c) The effect of a mortgage modification not described in subsection (b) of this section is not governed by this act. This act shall not be construed to negate the validity or priority of a mortgage modification not described in subsection (b) of this section.
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