Uniform Mortgage Modification Act

HOUSE BILL 26-1089
BY REPRESENTATIVE(S) Espenoza, Bacon, Carter, Duran;
also SENATOR(S) Snyder, Carson, Exum, Jodeh, Wallace, Weissman,
Coleman.
CONCERNING MORTGAGE MODIFICATIONS, AND, IN CONNECTION THEREWITH,
ENACTING THE "UNIFORM MORTGAGE MODIFICATION ACT".

Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, add article 40.5 to title
38 as follows:
ARTICLE 40.5
Uniform Mortgage Modification Act
38-40.5-101. Short title.
THIS ARTICLE 40.5 MAY BE CITED AS THE "UNIFORM MORTGAGE
MODIFICATION ACT".
38-40.5-102. Definitions.
NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act.
IN THIS ARTICLE 40.5:
(1) "E LECTRONIC" MEANS RELATING TO TECHNOLOGY HAVING
ELECTRICAL, DIGITAL, MAGNETIC, WIRELESS, OPTICAL, ELECTROMAGNETIC,
OR SIMILAR CAPABILITIES.
(2) "F INANCIAL COVENANT " MEANS AN UNDERTAKING TO
DEMONSTRATE AN OBLIGOR 'S CREDITWORTHINESS OR THE ADEQUACY OF
SECURITY PROVIDED BY AN OBLIGOR.
(3) "M ODIFICATION" INCLUDES CHANGE , AMENDMENT, REVISION,
CORRECTION, ADDITION, SUPPLEMENTATION, ELIMINATION , WAIVER, AND
RESTATEMENT.
(4) "MORTGAGE":
(A) MEANS AN AGREEMENT THAT CREATES A CONSENSUAL INTEREST
IN REAL PROPERTY TO SECURE PAYMENT OR PERFORMANCE OF AN
OBLIGATION, REGARDLESS OF:
(i) H OW THE AGREEMENT IS DENOMINATED , INCLUDING A
MORTGAGE, DEED OF TRUST, TRUST DEED, SECURITY DEED, INDENTURE, AND
DEED TO SECURE DEBT; AND
(ii) WHETHER THE AGREEMENT ALSO CREATES A SECURITY INTEREST
IN PERSONAL PROPERTY; AND
(B) D OES NOT INCLUDE AN AGREEMENT THAT CREATES A
CONSENSUAL INTEREST TO SECURE A LIABILITY OWED BY A UNIT OWNER TO
A CONDOMINIUM ASSOCIATION, OWNERS' ASSOCIATION, OR COOPERATIVE
HOUSING ASSOCIATION FOR ASSOCIATION DUES, FEES, OR ASSESSMENTS.
(5) "MORTGAGE MODIFICATION" MEANS MODIFICATION OF:
(A) A MORTGAGE;
(B) AN AGREEMENT THAT CREATES AN OBLIGATION , INCLUDING A
PROMISSORY NOTE, LOAN AGREEMENT, OR CREDIT AGREEMENT; OR
(C) A N AGREEMENT THAT CREATES OTHER SECURITY OR CREDIT
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ENHANCEMENT FOR AN OBLIGATION, INCLUDING AN ASSIGNMENT OF LEASES
OR RENTS OR A GUARANTY.
(6) "O BLIGATION" MEANS A DEBT , DUTY , OR OTHER LIABILITY
SECURED BY A MORTGAGE.
(7) "OBLIGOR" MEANS A PERSON THAT:
(A) OWES PAYMENT OR PERFORMANCE OF AN OBLIGATION;
(B) SIGNS A MORTGAGE; OR
(C) IS OTHERWISE ACCOUNTABLE, OR WHOSE PROPERTY SERVES AS
COLLATERAL, FOR PAYMENT OR PERFORMANCE OF AN OBLIGATION.
(8) "P ERSON" MEANS AN INDIVIDUAL , ESTATE , BUSINESS OR
NONPROFIT ENTITY , GOVERNMENT OR GOVERNMENTAL SUBDIVISION ,
AGENCY, OR INSTRUMENTALITY OR OTHER LEGAL ENTITY.
(9) "RECOGNIZED INDEX" MEANS AN INDEX TO WHICH CHANGES IN
THE INTEREST RATE MAY BE LINKED THAT IS:
(A) READILY AVAILABLE TO, AND VERIFIABLE BY, THE OBLIGOR; AND
(B) B EYOND THE CONTROL OF THE PERSON TO WHOM THE
OBLIGATION IS OWED.
(10) "RECORD", USED AS A NOUN, MEANS INFORMATION:
(A) INSCRIBED ON A TANGIBLE MEDIUM; OR
(B) STORED IN AN ELECTRONIC OR OTHER MEDIUM AND RETRIEVABLE
IN PERCEIVABLE FORM.
(11) "SIGN" MEANS, WITH PRESENT INTENT TO AUTHENTICATE OR
ADOPT A RECORD:
(A) EXECUTE OR ADOPT A TANGIBLE SYMBOL; OR
(B) A TTACH TO OR LOGICALLY ASSOCIATE WITH THE RECORD AN
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ELECTRONIC SYMBOL, SOUND, OR PROCESS.
38-40.5-103. Scope.
(a) EXCEPT AS PROVIDED IN SUBSECTION (c) OF THIS SECTION, THIS
ARTICLE 40.5 APPLIES TO A MORTGAGE MODIFICATION.
(b) THIS ARTICLE 40.5 DOES NOT AFFECT:
(1) LAW GOVERNING THE REQUIRED CONTENT OF A MORTGAGE;
(2) A STATUTE OF LIMITATIONS OR OTHER LAW, INCLUDING PART 2
OF ARTICLE 39 OF THIS TITLE 38, GOVERNING THE EXPIRATION OR
TERMINATION OF A RIGHT TO ENFORCE AN OBLIGATION OR A MORTGAGE;
(3) A RECORDING STATUTE;
(4) A STATUTE GOVERNING THE PRIORITY OF A TAX LIEN OR OTHER
GOVERNMENTAL LIEN;
(5) A STATUTE OF FRAUDS OR ARTICLE 71 OF TITLE 24; OR
(6) E XCEPT AS PROVIDED IN SECTION 38-40.5-104 (b)(8), LAW
GOVERNING THE PRIORITY OF A FUTURE ADVANCE.
(c) THIS ARTICLE 40.5 DOES NOT APPLY TO ANY OF THE FOLLOWING
MODIFICATIONS:
(1) A RELEASE OF, OR ADDITION TO, PROPERTY ENCUMBERED BY A
MORTGAGE;
(2) A RELEASE OF, ADDITION OF, OR OTHER CHANGE IN AN OBLIGOR;
OR
(3) AN ASSIGNMENT OR OTHER TRANSFER OF A MORTGAGE OR AN
OBLIGATION.
38-40.5-104. Effect of Mortgage Modification.
(a) FOR A MORTGAGE MODIFICATION DESCRIBED IN SUBSECTION (b)
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OF THIS SECTION:
(1) T HE MORTGAGE CONTINUES TO SECURE THE OBLIGATION AS
MODIFIED;
(2) T HE PRIORITY OF THE MORTGAGE IS NOT AFFECTED BY THE
MODIFICATION;
(3) THE MORTGAGE RETAINS ITS PRIORITY REGARDLESS OF WHETHER
A RECORD OF THE MORTGAGE MODIFICATION IS RECORDED IN THE OFFICE OF
THE COUNTY CLERK AND RECORDER IN THE COUNTY WHERE THE PROPERTY
IS LOCATED; AND
(4) THE MODIFICATION IS NOT A NOVATION.
(b) SUBSECTION (a) OF THIS SECTION APPLIES TO ONE OR MORE OF
THE FOLLOWING MORTGAGE MODIFICATIONS:
(1) AN EXTENSION OF THE MATURITY DATE OF AN OBLIGATION;
(2) A DECREASE IN THE INTEREST RATE OF AN OBLIGATION;
(3) I F THE CHANGE 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;
(4) A CAPITALIZATION OF UNPAID INTEREST OR OTHER UNPAID
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MONETARY OBLIGATION;
(5) A FORGIVENESS , FORBEARANCE , OR OTHER REDUCTION OF
PRINCIPAL, ACCRUED INTEREST, OR OTHER MONETARY OBLIGATION;
(6) A MODIFICATION OF A REQUIREMENT FOR MAINTAINING AN
ESCROW OR RESERVE ACCOUNT FOR PAYMENT OF AN OBLIGATION ,
INCLUDING TAXES AND INSURANCE PREMIUMS;
(7) A MODIFICATION OF A REQUIREMENT FOR ACQUIRING OR
MAINTAINING INSURANCE;
(8) A MODIFICATION OF AN EXISTING CONDITION TO ADVANCE
FUNDS;
(9) A MODIFICATION OF A FINANCIAL COVENANT; AND
(10) A MODIFICATION OF THE PAYMENT AMOUNT OR SCHEDULE
RESULTING FROM ANOTHER MODIFICATION DESCRIBED IN THIS SUBSECTION
(b).
(c) THE EFFECT OF A MORTGAGE MODIFICATION NOT DESCRIBED IN
SUBSECTION (b) OF THIS SECTION IS GOVERNED BY OTHER LAW.
38-40.5-105. Uniformity of Application and Construction.
IN APPLYING AND CONSTRUING THIS UNIFORM ACT, A COURT SHALL
CONSIDER THE PROMOTION OF UNIFORMITY OF THE LAW AMONG
JURISDICTIONS THAT ENACT IT.
38-40.5-106. Relation to Electronic Signatures in Global and
National Commerce Act.
THIS ACT MODIFIES , LIMITS , OR SUPERSEDES THE ELECTRONIC
SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT, 15 U.S.C. SEC.
7001 ET SEQ., AS AMENDED, BUT DOES NOT MODIFY, LIMIT, OR SUPERSEDE 15
U.S.C. SEC. 7001 (c), OR AUTHORIZE ELECTRONIC DELIVERY OF ANY OF THE
NOTICES DESCRIBED IN 15 U.S.C. SEC. 7003 (b).
38-40.5-107. Transitional Provision.
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THIS ARTICLE 40.5 APPLIES TO A MORTGAGE MODIFICATION MADE ON
OR AFTER THE EFFECTIVE DATE OF THIS ACT REGARDLESS OF WHEN THE
MORTGAGE OR THE OBLIGATION WAS CREATED.
SECTION 2. Act subject to petition - effective date. This act
takes effect at 12:01 a.m. on the day following the expiration of the
ninety-day period after final adjournment of the general assembly (August
12, 2026, if adjournment sine die is on May 13, 2026); except that, if a
referendum petition is filed pursuant to section 1 (3) of article V of the state
constitution against this act or an item, section, or part of this act within
such period, then the act, item, section, or part will not take effect unless
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approved by the people at the general election to be held in November 2026
and, in such case, will take effect on the date of the official declaration of
the vote thereon by the governor.
____________________________ ____________________________
Julie McCluskie James Rashad Coleman, Sr.
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Vanessa Reilly Esther van Mourik
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
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