The proposed Uniform Mortgage Modification Act of 2025 aims to streamline the mortgage modification process for both residential and commercial borrowers, helping them avoid foreclosure while preserving their existing mortgage relationships. The Act introduces "safe harbor modifications," which include extensions of maturity dates, decreases in interest rates, and capitalization of unpaid interest, ensuring that these modifications do not affect the priority of the mortgage or its obligation. It clarifies that such modifications are not considered novations, thereby maintaining the original loan's security. Additionally, the Act specifies that recording a modification is not necessary to retain priority, although it may be beneficial for other legal purposes.

Furthermore, the Act delineates modifications that fall outside the safe harbors, which will still be governed by existing laws, and explicitly excludes certain changes, such as alterations to collateral or borrower details, to protect the rights of junior lienholders. It does not disrupt existing laws regarding mortgage content, statutes of limitations, or recording requirements, thus balancing the interests of senior mortgage holders and junior lienholders. The legislation also amends the Electronic Signatures in Global and National Commerce Act to ensure consistency with electronic transactions and includes a transitional provision for mortgage modifications made after the Act's effective date. Overall, the Uniform Mortgage Modification Act is designed to enhance predictability and efficiency in mortgage transactions, benefiting both borrowers and lenders.