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1997 SESSION


CHAPTER 205
An Act to amend and reenact §§ 55-58.2 and 55-66.01 of the Code of Virginia, relating to credit line deeds of trust; change of noteholder.
[H 1953]
Approved March 9, 1997

Be it enacted by the General Assembly of Virginia:

1. That §§ 55-58.2 and 55-66.01 of the Code of Virginia are amended and reenacted as follows:

§ 55-58.2. Credit line deed of trust defined; relative priority of credit line deed of trust and other instruments of judgment.

1. For the purpose of this title, the term "credit line deed of trust" is any deed of trust, mortgage, bond or other instrument, entered into after July 1, 1982, in which title to real property located in this Commonwealth is conveyed, transferred, encumbered or pledged to secure payment of money including advances to be made in the future by the noteholder named in the credit line deed of trust.

2. A credit line deed of trust shall set forth on the front page thereof, either in capital letters or in language underscored, the words "THIS IS A CREDIT LINE DEED OF TRUST." Such phrase shall convey notice to all parties that the noteholder named therein and the grantors and other borrowers identified therein have an agreement whereby the noteholder may make or contemplates making advances from time to time against the security described in the deed of trust. Such deed of trust shall specify therein the maximum aggregate amount of principal to be secured at any one time.

3. From the date of the recording of a credit line deed of trust, the lien thereof shall have priority (i) as to all other deeds, conveyances, or other instruments, or contracts in writing, which are unrecorded as of such date and of which the noteholder has no knowledge or notice, and (ii) as to judgment liens subsequently docketed, except as provided in subsection 4 of this section. Such priority shall extend to any advances made following the recordation of the credit line deed of trust. Amounts outstanding, together with interest thereon, and other items provided by § 55-59, shall continue to have priority until paid or curtailed. Mechanics' liens created under Title 43 shall continue to enjoy the same priority as created by that title. Purchase money security interests in goods and fixtures shall have the same priority as provided in §§ 8.9-312 and 8.9-313.

4. Notwithstanding the provisions of subsections 1, 2 and 3 of this section, if a judgment creditor gives notice to the noteholder of record at the address indicated in the credit line deed of trust, such credit line deed of trust shall have no priority as to such judgment for any advances or extensions of credit made under such deed of trust from the day following receipt of that notice except those which have been unconditionally and irrevocably committed prior to such date.

5. In addition to the language specified in subsection 1 of this section, the credit line deed of trust shall set forth the name of the noteholder secured and the address at which communications may be mailed or delivered to him. Such name or address may be amended changed or modified by duly recorded amendment to the deed of trust instrument executed by the noteholder only. If the note or indebtedness secured by the credit line deed of trust is assigned or transferred, the name and address of the new noteholder may be set forth in the certificate of transfer provided by § 55-66.01. Such original name or address, or if changed, by amendment such changed name or address, shall be the address for delivery of notices contemplated by this section, notwithstanding transfer of the note. Receipt of notice at such address shall be deemed receipt by the noteholder.

6. [Repealed.]

7. The grantor may require, at any time, a modification under the credit line deed of trust, whereby any priority over subsequently recorded deeds of trust is surrendered as to future advances, which advances are in the discretion of the party secured by the credit line deed of trust.

§ 55-66.01. Protection of assignees or transferees of debts secured by real estate; form of certificate of transfer.

Whenever a debt or other obligation secured by a deed of trust, mortgage or vendor's lien on real estate has been assigned, the assignor or the assignee, at its option, may cause the instrument of assignment to be recorded in the clerk's office of the circuit court where such deed of trust, mortgage or vendor's lien is recorded provided such instrument is otherwise in recordable form, or may cause a certificate of transfer signed by the assignor to be recorded in such clerk's office, and such instrument of assignment or certificate of transfer, upon recordation, shall operate as a notice of such assignment. The instrument of assignment or certificate of transfer shall be indexed in the name of the assignor and in the names of the obligor or maker, and the trustees, as applicable, all of whose names shall be set forth in such instrument or certificate. The certificate of transfer shall conform substantially to the following: 



                       CERTIFICATE OF TRANSFER

Place of Record:                      Clerk's Office of the Circuit

                                      Court of the  ........... of

                                      ............, Virginia

Date of [Deed of Trust/

Mortgage/Vendor's Lien]:              ................,

Deed Book

........, Page  ........

Name of Obligor or Maker:       ....................................

Name(s) of Trustee(s)

  [if a Deed of Trust]:         ....................................

                                ....................................

Name of Original

Payee or Obligee:               ....................................

Original Amount Secured

 [if applicable]:

 $ .................................................................

   The undersigned, the original payee or obligee [or the subsequent
assignee] of the obligation secured by the above-mentioned [Deed of
Trust/Mortgage/Vendor's Lien], hereby certifies that the obligations
secured thereby have been assigned to ..............................

 ...................................................................


   [ If a credit line deed of trust, the name and address to which
notice may be mailed or delivered to the Noteholder as provided by
§ 55-58.2 is as follows:

           .........................................................

           ........................................................]

   Given under [my/our] hand(s) as of the ..........................

day of  .................., ..........

                                   .................................

                                   (Assignor)

.................. of  .............

County/City of  ....................,          to wit:

Subscribed, sworn to and acknowledged before me by .................

this  .................... day of ....................... 19  ......

My Commission Expires:        ......................................

                              ......................................

                                           Notary Public

For purposes of this statute, the word "assigned" shall include endorsed, pledged, hypothecated or otherwise transferred. Nothing in this statute shall be deemed to invalidate any other form or notice of assignment that may have been heretofore recorded. Nothing in this statute shall imply that recordation of the instrument of assignment or a certificate of transfer is necessary in order to transfer to an assignee the benefit of the security provided by the deed of trust, mortgage or vendor's lien.