Commission hears Bar counsel's concerns, will reference statutes before introducing Mortgage Modification Act

Madam Chair introduced agenda item 1B, the Uniform Mortgage Modification Act, and invited the Bar Association's representatives to speak. Seth Holly, in-house counsel for First American Title (speaking on behalf of the Colorado Bar Association), said he had no prepared testimony but raised several drafting concerns and offered to answer questions.

Holly identified a specific drafting risk in the phrase "other unpaid monetary obligation" (transcript reference: page 6, line 14). He said that wording "creates some ambiguity" in a mortgage context and recommended excluding the phrase or aligning it with the defined term "obligation" to avoid unintentionally broadening the scope of modifications. Holly cautioned that open-ended language could prejudice junior lienholders if a modification recapitulated obligations beyond what the mortgage secures.

Commissioners discussed how the Act's definition of "obligation" (page 3, line 19 in the draft) might limit scope by tying obligations to liabilities secured by the mortgage. Commissioner Espinosa and others observed the two provisions could be read together; Commissioner Levy and others noted the language may have been intentionally broad in places and that narrowing it could be a policy choice affecting uniformity.

Holly also urged the commission to add explicit cross-references to existing Colorado law governing future advances (he cited the statute in the transcript as "38-39-106") and to the state's fifteen-year bar on collections after a recorded deed of trust; he framed those as clarifying references so the Act would not be read to alter current Colorado remedies or timing rules.

Commissioner Love, the drafter, asked for time to review the suggested wording and to consult the Uniform Law Commission and the bill sponsors. The commission agreed by voice and "no objection" that Commissioner Love should work with sponsors and the Uniform Law Commission and keep Mr. Holly and the Colorado Bar Association liaison informed; the plan is to introduce the Act as drafted in order to meet filing deadlines, while retaining the option to propose a committee amendment if the policy discussion leads to changes.

Next steps: Commissioner Love will research the suggested statutory cross-references and report back; sponsors and the Uniform Law Commission may be asked to consider a committee amendment before final legislative action.