17:12B-156. Investments in additional loans

156. Investments in additional loans.

A. An association may make additional loans or advances for any purpose expressly or impliedly reserved or provided for in any bond, mortgage or other obligation held by or hereafter acquired by any such association subject to the provisions of subsection D of this section, otherwise;

B. An association may make additional loans to borrowing members for the purpose of repairs, alterations, or improvements already made or to be made upon real estate owned by such borrowing member, subject to the conditions and limitations of subsection D of this section.

C. An association may make additional loans to borrowing members for the purpose of paying the cost of insurance upon the life of such borrowing member. Such policy of insurance may also include health, accident or disability features. The proceeds of such a policy of insurance shall be applied in accordance with the terms and conditions contained therein; provided, however, the amount of such insurance shall not exceed the amount loaned on the mortgage lien held by the association. Any additional loan made under this subsection shall be made pursuant to the conditions and limitations contained in subsection D of this section.

D. Any additional loan to borrowing members made pursuant to the provisions of this section shall be made subject to the following conditions and limitations:

(1) The real estate securing such an additional loan shall be real estate upon which the association already holds a mortgage lien.

(2) (Deleted by amendment, P.L.1997, c.33.)

(3) (Deleted by amendment, P.L.1997, c.33.)

(4) (Deleted by amendment, P.L.1997, c.33.)

(5) Each such additional loan shall be evidenced by an obligation which shall state the terms on which such loan is made, and the amount thereof shall be added to the amount due on the association's mortgage against such real estate.

(6) The payment of such additional loan shall be secured by the mortgage the association already holds on such real estate.

(7) No search or examination of the title to the mortgage real estate shall be required.

All persons who acquire any rights in, or liens upon, the mortgaged real estate, subsequent to the recording of any association's mortgage, shall hold such rights and liens subject to the association's right to make such additional loans.

L.1963,c.144,s.156; amended 1997, c.33, s.29.