IBA Compliance Connection

Your go to source for compliance!

Are we required to include a loan’s payment terms and interest rate in a mortgage or modification? We would like to cease including this information in our recorded documents if it is not required.

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No, we do not believe you are required to include a loan’s payment terms and interest rate in a mortgage or modification.

The Illinois Conveyances Act provides that a mortgage may be substantially in a form that “recite[s] the nature and amount of indebtedness, showing when due and the rate of interest, and whether secured by note or otherwise.” However, the Act also states that these provisions “are, and have always been, permissive and not mandatory” and expressly provides that a recorded mortgage is not required to include an interest rate or maturity date. Additionally, while the sample mortgage provisions reference “the nature and amount of indebtedness,” they do not address a loan’s specific payment terms.

Consequently, we do not believe you are required to include a loan’s payment terms or interest rate in a mortgage or modification.

For resources related to our guidance, please see:

  • Illinois Conveyances Act, 765 ILCS 5/11(a) (“Mortgages of lands may be substantially in the following form: The Mortgagor (here insert name or names), mortgages and warrants to (here insert name or names of mortgagee or mortgagees), to secure the payment of (here recite the nature and amount of indebtedness, showing when due and the rate of interest, and whether secured by note or otherwise), the following described real estate (here insert description thereof), situated in the County of …., in the State of Illinois. Dated (insert date). (signature of mortgagor or mortgagors)”)
  • Illinois Conveyances Act, 765 ILCS 5/11(b) (“The provisions of subsection (a) regarding the form of a mortgage are, and have always been, permissive and not mandatory. Accordingly, the failure of an otherwise lawfully executed and recorded mortgage to be in the form described in subsection (a) in one or more respects, including the failure to state the interest rate or the maturity date, or both, shall not affect the validity or priority of the mortgage, nor shall its recordation be ineffective for notice purposes regardless of when the mortgage was recorded.”)