Posted by Mark (SDCA) on March 09, 1999 at 12:58:29:
Higher yield. If a 1st is paying 8%, the second might pay 12%.
Buying second mortgage note - Posted by Ben
Posted by Ben on March 09, 1999 at 10:43:02:
Can anyone tell me the advantages and disadvantages of
buying a second position mortgage? Obviously a first position is less risky but why would someone buy a second?
Ben
Re: Buying second mortgage note - Posted by Stacy (AZ)
Posted by Stacy (AZ) on March 09, 1999 at 12:07:38:
Seconds can be good investments, provided the LTV is at or below about 80% for the second and the first combined. You have the right to foreclose on your second if the first or your second are not being paid, so the security is there. The only disadvantage is that you may have to make the first mortgage payments while foreclosing to protect your position.
Stacy
Re: One more small disadvantage - Posted by Stacy (AZ)
Posted by Stacy (AZ) on March 09, 1999 at 15:42:46:
If you own a junior note, you need to watch the senior loan payments to be sure they are kept current. You don’t want one of them to go into default and foreclose before you have a chance to step in and keep them current and foreclose on your junior note.
Stacy