IBA Compliance Connection

Your go to source for compliance!

We have a commercial multiple advance loan that is maturing. The loan officer would like to extend the maturity date of the note by one year but will not be referencing any maturity date in the mortgage. The loan officer wishes to spare the borrower the expense of recording a mortgage modification when we extend the loan again, as we intend to extend it annually. Does the maturity date of the note have to match the maturity date of the mortgage, and does a mortgage need to contain a maturity date at all?

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First, our understanding is that a mortgage does not have its own maturity date separate from the maturity date of its corresponding promissory note. We believe that the maturity date listed on a mortgage (if any is listed) refers to the promissory note’s maturity date — the date on which all amounts under the note are due — and not to the expiration of the mortgage lien.

While a mortgage itself does not have a maturity date, mortgages do eventually expire under Illinois law. A mortgage that does not list a due date for the corresponding promissory note will expire thirty years after the date of the mortgage, which a lender may extend beyond thirty years by recording an extension agreement or affidavit. A mortgage that does list a due date on its face will expire twenty years from the time the last payment on such mortgage becomes due, which a lender may similarly extend by recording an extension agreement or affidavit. In either case, we would refer to the date on which a mortgage ceases to be effective as an expiration date rather than as a “maturity date.”

Also, a mortgage is not required to list a maturity date for the corresponding promissory note. The Illinois Conveyances Act expressly provides that recorded mortgages do not need to include a maturity date. If you do decide to list the promissory note’s maturity date on a mortgage, the date listed should be accurate and match the actual maturity date listed on the note — but as explained above, Illinois law does not require mortgages to list a maturity date at all.

For resources related to our guidance, please see:

  • Illinois Conveyances Act, 765 ILCS 5/11(b) (“The failure of an otherwise lawfully executed and recorded mortgage . . . 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.”)
  • Illinois Code of Civil Procedure, 735 ILCS 5/13-116(b) (“The lien of every mortgage . . . in which no due date is stated upon the face, or is ascertainable from the written terms thereof, shall cease by limitation after the expiration of 30 years from the date of the instrument creating the lien, unless the owner of such mortgage . . . within such 30 year period . . . files or causes to be filed for record . . . an extension agreement executed as hereinafter provided.”)
  • Illinois Code of Civil Procedure, 735 ILCS 5/13-116(a) (“The lien of every mortgage . . . the due date of which is stated upon the face, or ascertainable from the written terms thereof . . . shall cease by limitation after the expiration of 20 years from the time the last payment on such mortgage . . . became or becomes due upon its face and according to its written terms, unless the owner of such mortgage . . . within such 20 year period . . . files or causes to be filed for record . . . an extension agreement executed as hereinafter provided.”)