Who owns the property?

Question

Can one property have 2 mortgages by 2 different lenders? If so, who is on the title as owner, or does each lender have a portion of ownership, such as the outstanding loan balance owed to them?

OR

Is there one mortgage and a second secured loan? If just one mortgage, is the first lender the only one on the title as owner?

Jasmine Claye · Answer

That makes sense... Thanks for explaining.

Jon Holdman · Answer

Nope.  Any lender can foreclose.  For that matter, any lien holder can foreclose, including the guy who didn't get paid for working on the property.

The rule of thumb is "first in time, first in line".  When any specific lien holder forecloses, junior lien holders (recorded later) are wiped out.  Senior lien holders are not.  So, the winner of such an auction, or the lien holder if there are no bidders, becomes the owner.  But they are now responsible for any senior liens.

There are variations on this from state to state.  Here in CO, for example, some portion of HOA dues may be senior even to a first mortgage.  Junior lien holders also have reception rights.  And the IRS always has some senior rights in all state.

Jasmine Claye · Answer

Ok thanks for clarifying. I initially thought the owner is the owner (name on title) and the lender used the property as colleteral. So if there are multiple mortgages all using the same property as security, is the senior lender (first mortgage holder) the only lender able to foreclose?

Jon Holdman · Answer

The owner owns the property. Lender's don't own the property, they have a security interest in the property.  There is no limit on the number of lien holder's that can have a security interest against a property.

Joel Owens · Answer

Jasmine you need to get the basics down.

Lender is usually just holding paper and not on title for the property unless they foreclose or do a DIL and take the property back.

A property can have many mortgages by different lenders on it.Usually the senior lender in the first order of recording has senior position unless they grant a junior lender a superior position above them in a default workout but it rarely happens.