The committee reviewed a Uniform Law Commission draft, the Uniform Mortgage Modification Act, intended to clarify whether and when a mortgage modification changes lien priority.

Scott Meyer, presenting for the Uniform Law Commission and the Wyoming Bankers Association, said the bill would create “safe harbors” that allow common, non‑prejudicial mortgage changes (for example, lowering an interest rate or capitalizing unpaid interest) to be treated as modifications that do not cause loss of priority, removing the need to rerecord mortgages and incur new title and endorsement costs. Meyer said the change should reduce transaction costs and encourage lenders to consider borrower‑friendly modifications.

The draft specifies categories of modifications covered by the safe harbor — extension of maturity dates, decreases in interest rates, changes in interest‑calculation methods, capitalization of interest, reductions or forbearance, escrow changes and similar contract‑consistent adjustments — and enumerates actions that remain outside the safe harbor (for example, substitution of collateral, release of obligations, or transfers that materially prejudice junior lienholders).

Banking representatives supported the effort but asked for a clarifying sentence to ensure Wyoming courts interpret the act consistent with state law rather than importing other jurisdictions’ rulings. The committee approved that amendment and voted to carry the draft forward for additional stakeholder review and a possible final vote at the next meeting.

Why it matters: Uncertainty about whether modifications affect lien priority can deter lenders from modifying loans to avoid foreclosure; lenders and borrowers both bear transaction costs when mortgages are rerecorded. The uniform act seeks to reduce legal uncertainty for common, non‑prejudicial loan modifications while preserving protections for junior lienholders in the case of materially prejudicial changes.

Ending: The committee asked interested stakeholders — banks, title insurers, lenders, borrower advocates and the Uniform Law Commission — to submit final language, comment letters and any drafting changes for the next meeting.