In late years the mortgage or deed of trust to secure indebtedness that may not be created until after the execution and recordation of the security instrument has assumed a new importance in real estate financing. Formerly confined largely to the construction loan, such financing now often contemplates a possible future loan equal to any amount which may have been repaid on the original loan, or the use of the security instrument as general collateral for future advances, which may vary in amount from time to time. Such transactions are subject not only to the usual hazards of mortgage lending, but the present state of the law indicates other possible pitfalls. The two general legal problems involved are, first, the validity of future advances under such instruments as between the parties and, second, whether the advances have priority over liens which may attach to the real estate between the time of recordation of the security instrument and the actual creation of the subsequent indebtedness by the making of later advances. This discussion assumes that there are no other liens as of the time of recordation which might take priority, so that the sole question is with respect to such intervening liens.
R. E. Stealey,
The Mortgage for Future Advances in West Virginia,
W. Va. L. Rev.
Available at: https://researchrepository.wvu.edu/wvlr/vol56/iss2/4