CHAPTER 6.04. Modifications

• Jurisdiction: United States

6.04. Modifications

Modifications of a mortgage follow normal contract principles, although the effect of a modification on security interests and priorities is governed by statute. The modification must be in writing, as the statute of frauds bars an oral modification of a mortgage.⁹⁸ There must be consideration for the modification of a mortgage.⁹⁹ Consideration can be a benefit to the promisor or detriment to the promisee.¹⁰⁰ Except for a modification that increases the maximum stated principal amount of the obligations secured by the mortgage, a mortgage may be modified without affecting its original lien priority.¹⁰¹ However, an open issue is the effect on mortgage priority of a modification of the mortgage that increases the maximum principal amount. In other words, does only the amount of the increase lose the original lien priority, or does the entire obligation lose the original lien priority? This is a question not yet answered by the Delaware courts.

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Notes:

^[98] Wilmington Trust Co. v. Jestice, 2012 WL 1414282 (Del. Super. Jan. 11, 2012); Quillen v. Sayers, 482 A.2d 744, 747 (Del. 1984); 6 Del. C. § 2714. Of course, there is an exception when there is evidence of actual part performance of an oral agreement. Quillen v. Sayers at 747.

^[99] DeCecchis v. Evers, 174 A.2d 463 (Del. Super. 1961).

^[100] First Mortgage Company of Pennsylvania v. Federal Leasing Corp., 456 A.2d 795 (Del. 1982). But the presence of a seal creates the presumption of consideration. See Monroe Park v. Metropolitan Life, 457 A.2d 734 (Del. 1983); Husband (PHO) v. Wife (LO), 418 A.2d 994 (Del...