Crucial Exams

Multistate Bar Examination Practice Question

A lender provides a mortgage to a borrower with a clause permitting additional loans to be secured under the same agreement without new documentation. If the borrower defaults, which loans will be secured by the mortgage?

  • Future advances supersede the original loan under the mortgage, making it inapplicable to earlier debts.

  • The original loan is secured, and subsequent loans require new documentation to be enforceable under the mortgage.

  • The original loan is secured, while subsequent debts require a new mortgage even when a future advance clause exists.

  • The initial loan and later advances under the same agreement are secured as long as the future advance clause is in effect.

Multistate Bar Examination
Real Property
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