{"data":{"id":"us-ky/krs-382.385","jurisdiction":"us-ky","citation":"KRS 382.385","heading":"Mortgage on real estate to secure payment of sums due under line of credit","body":"or revolving credit plan -- Priority of liens -- Mortgage amendment -- Release\nof lien.\n(1) As used in this section:\n(a) \"Line of credit\" means a note, commitment, instrument, or agreement in\nwriting between a lender and a debtor pursuant to which:\n1. The lender may extend loans, advances, or other extensions of credit to,\nor for the benefit of, the debtor; and\n2. The total amount of loans, advances, or extensions of credit outs tanding\nmay increase or decrease from time to time.\n(b) \"Revolving credit plan\" means an arrangement between a lender and a debtor\npursuant to which:\n1. The lender may extend credit to the debtor by permitting the debtor to\nmake purchases of goods, service s, and anything else of value or obtain\nloans, from time to time, directly from the lender or indirectly by use of\na credit card, check, or other device, as the plan may provide;\n2. The unpaid balances of purchases made, the principal of loans obtained,\nand finance and other appropriate charges are debited to the debtor's\naccount;\n3. A finance charge, if made, is not precomputed, but is computed on the\noutstanding unpaid balances of the debtor's account from time to time;\nand\n4. The lender renders bills or statements to the debtor at regular intervals,\nwhich need not be a calendar month (the \"billing cycle\"), the amount of\nwhich bills or statements is payable by and due from the debtor on a\nspecified date stated in the bill or statement or, at the debtor's o ption,\nmay be paid in installments.\n(2) (a) Any mortgage of real property may secure payment of any or all sums due and\npayable by the debtor under a line of credit or under a revolving credit plan if\nthe mortgage:\n1. States, in substance or effect, that t he parties intend that the mortgage\nsecures the line of credit or revolving credit plan;\n2. Specifies the maximum principal a mount of credit which may be\nextended under the line of credit or the maximum credit limit of the\nrevolving credit plan which, in each case, may be outstanding at any\ntime or times under the line of credit or plan, and which is to be secured\nby the mortgage.\n(b) The mortgage shall remain in full force and effect until released of record as\nprovided in subsection (5) of this section and the validity, continued\neffectiveness, and priority of the mortgage shall not be affected or impaired by\nthe fact that no loan, advance, or extension of credit is made at the time of the\nexecution or recordation of the mortgage, or that the outstanding balance due\nunder the line of credit or revolving credit plan secured by the mortgage is\nzero at any time or times.\n(3) Except as provided in paragraphs (a), (b), (c), and (d) of this subsection or in any\nwritten subordination or other written agreement entered into by the lender relating\nto the priority of the mortgage referred to in subsection (2) of this section, the lien\nof the mortgage referred to in subsection (2) of this section shall be superior to any\nliens or encumbrances of any kind created or arising after recordation of the\nmortgage, even to the extent of sums advanced by the lender with actual or\nconstructive notice of a subsequently created lien, but the lien of the mortgage shall\nbe inferior to:\n(a) Real estate tax liens and liens for public improvement assessments explicitly\nstated by statute to be superior to other nontax liens;\n(b) Any construction funds advanced  under, or any additional indebtedness\nincurred within the meaning of KRS 382.520 and secured by, the lien of any\nmortgage recorded prior to the mortgage referred to in subsection (2) of this\nsection;\n(c) Any sums specifically authorized to be advanced under any mortgage recorded\nprior to the mortgage referred to in subsection (2) of this section for, or paid\non account of, taxes, charges, fines, and assessments against covering the\nproperty described in the mortgage or to effect insurance thereon; or\n(d) Valid mechanics' or materialmen's liens, with respect to which all filing and\nother requirements of KRS Chapter 376 have been satisfied, for the\nperformance of labor or furnishing of materials for those purposes set forth in\nKRS 376.010(1) with respect to a n owner-occupied, single or double -family\ndwelling, but only to the extent of sums advanced by the lender after the filing\nof the statement required under the applicable section of KRS Chapter 376.\n(4) (a) The debtor or his agent may, at any time or times, request the lender to amend\nthe mortgage to reduce the maximum amount of credit specified in the\nmortgage referred to in subsection (2) of this section which may be extended\nunder the line of credit or revolving credit plan by sending by certified mail,\nreturn receipt requested, or physically delivering to the lender at the address\nand to the person or department, if any, specified in the agreement\nestablishing the line of credit or revolving credit plan, a written request signed\nand acknowledged by all de btors obligated under the line of credit or\nrevolving credit plan. The request shall:\n1. Specifically, and not by implication, describe the line of credit or\nrevolving credit plan by account or other identifying number and request\nthat the line of credit o r plan be amended by reducing the maximum\namount of credit which may be extended under the line of credit or the\namount of the credit limit of the revolving credit plan which, in either\ncase, may be outstanding from time to time under the line of credit or\nrevolving credit plan, to an amount specified in the notice. The amount\nmay not, however, be less than the balance owing under the line of credit\nor revolving credit plan at the time the request referred to in this\nparagraph is received;\n2. Identify the r eal property covered by the mortgage referred to in\nsubsection (2) of this section to which the request relates and give the\ndate, volume, and first page of the records of the county clerk where the\nmortgage is recorded, which information shall be provided  to the debtor\nwithin sixty (60) days of recording by the lender; and\n3. Be accompanied by funds sufficient to pay the filing fee for recording\nthe amendment referred to in paragraph (b) of this subsection.\n(b) Within ten (10) business days after actual re ceipt of the request referred to in\nparagraph (a) of this subsection and of the funds sufficient to pay the filing\nfee, the lender shall record in the office of the county clerk in which the\nmortgage referred to in subsection (2) of this section is recorde d an\namendment to the mortgage reflecting the reduction in the maximum amount\nof credit at any time or times outstanding which may be extended under the\nline of credit or revolving credit plan secured by the mortgage.\n(c) If within the ten (10) day period the lender fails to record the amendment to\nthe mortgage referred to in paragraph (b) of this subsection, the debtor may\nrecord a copy of the written request referred to in paragraph (a) of this\nsubsection upon payment of the same filing fee as provided fo r in an\namendment to a mortgage. If the request complies with all the requirements of\nthis section, the recording of the request shall constitute and be deemed to be\nan amendment to the line of credit or revolving credit plan and the mortgage\nto the extent described in the request.\n(5) The lender shall be obligated to release the lien of the mortgage referred to in\nsubsection (2) of this section:\n(a) If the line of credit or revolving credit plan is closed or terminated in\naccordance with its terms and all amounts owed by the debtor thereunder are\npaid in full; or\n(b) Upon the written request to release the mortgage signed by all debtors or their\nagents obligated under the line of credit or revolving credit plan, which notice\nshall be sent by certified mail, return receipt requested, or physically delivered\nto the lender. The lender shall file a properly executed satisfaction of the\nmortgage upon payment of the balance owing under the line of credit or\nrevolving credit plan at the time the request is received . From and after the\nrequest, the debtor shall have no right to request or demand that the lender\nextend credit under the line of credit or revolving credit plan, and the lender\nshall be released from all obligations and commitments to extend credit\nthereunder.\n(6) The provisions of KRS 382.330, 382.365, 382.430, and 382.520 shall not be\napplicable to the mortgage referred to in subsection (2) of this section.\n(7) This section is not exclusive and shall not prohibit the use of other types of\nmortgages or ot her instruments given for the purpose of creating a lien on real\nproperty permitted by law.","path":["KRS Chapter 382"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=35626","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:12Z","sha256":"16ebc0fa1fe174be26bfa6d95c861e443677f7a778637cc244df297ffe5b0b6e","source_id":"us-ky","stale":false,"prev":"us-ky/krs-382.380","next":"us-ky/krs-382.390"},"notice":"GroundRules: Original legal text. Not legal advice."}