When does a second mortgage become a first - Posted by Sam-OH

Posted by ScottE(CT) on June 16, 2000 at 06:57:21:

Once the first mortage is paid off, the next mortgage on the deed is now 1st. 1st, 2nd, 3rd… etc just means the order they were recorded on the deed.

When does a second mortgage become a first - Posted by Sam-OH

Posted by Sam-OH on June 16, 2000 at 06:43:52:

Hi everyone, I have a few questions I need some answers to see if a possible deal exists and how it can be put together. A seller called to let me know about some properties he needs to sell because he his relocating. He said on one particular property that there is no first mortgage but that there is a 10 year second, which is a line of credit. My first question is if there is no first lien then does the second automatically take first lien position? Is there any way you can assume the second? Is there away around this by forming a trust that the second would not even know when you put a new first on the property? If so how can this be put together? The seller is very motivated and flexible. Any posts are greatly appreciated. Thanks

Thanks for all the help (nt) - Posted by Sam-OH

Posted by Sam-OH on June 16, 2000 at 17:29:23:

(nt)

Re: When does a second mortgage become a first - Posted by dew

Posted by dew on June 16, 2000 at 14:26:04:

If the line of credit is recorded against the property and there are no other liens then it is the 1st. One can get liens to change position by having a lien holder sign a Subordination of position. Allowing the line of credit to remain (if it is a lien), but they would accept 2nd position if favor of a new first being recorded. title company records all of this at the same time.
Hope that helps.

I had a first and second mortgage ?change positions? ? due to BANKER error. - Posted by SusanL.–FL

Posted by SusanL.–FL on June 16, 2000 at 08:29:59:


Had something kind of unusual happen awhile back.

Aug. 1996 I had a first mortgage (bank) and a second mortgage (owner finance) on my commercial property. Twenty eight days after closing on the property, I wound up having to refinance my first mortgage in order to buy out ?shyster? partners.

When the banker recorded the new mortgage, he neglected to fill out the paperwork correctly and wound up putting his loan in SECOND position!

When he discovered ?the error of his ways?, he turned a whiter shade of pale…as the old song goes?

The ?situation? was remedied (QUICKLY, I might add)and we got on with our lives.


Doo doo happens in the world of real estate. :slight_smile:


BTW, that particular loan was the EASIEST bank loan I have EVER come across! I talked to the banker on the phone; he pulled my credit report. (At the time, I had a dozen or so sheets on my credit report of pristine credit.) He okayed the loan—never having even MET
me—and he had a check waiting on his desk for me the very next morning!

Ahhhhhhh?..the good old days?. :slight_smile:

Re: When does a second mortgage become a first - Posted by Jason Perry_NH

Posted by Jason Perry_NH on June 16, 2000 at 07:25:43:

You are not going to be able to assume a line of credit on a property (as far i have experienced) due to the fact that --unless it is closed and paid off – it can continue to be charged on — Hope this helps