Senior lien of 2 mortgages recorded at the same time
Hello everyone,
I've come across a property that is undergoing foreclosure. It has two mortgages, both of which were recorded at the same date and time. However, the page numbers in the same book are different. In this scenario, are both mortgages considered senior liens, or is the one recorded earlier in the book, indicated by the lower page number, deemed the senior lien?
Thanks,
#1 All Forums Contributor
- Investor
- Virginia
@Evan Gater
Both are not senior
The one that was recorded first (lower book and page number) would be the senior in most instances unless it was recorded inproperly and there was a subordination agreement
Typically the higher value loan is first as well when recording at same time.
Hope this helps
It definitely helps. Thank you very much, @Chris Seveney
#2 Foreclosures Contributor
- Paradise, CA
I had a situation this last yaer where I had a simultaneously recorded first and second (in practicality). Fortunately they were both my bank's liens but they were a potential nightmare to fix.
We did a rate and term refinance (no one would do a rate and term in their right mind today but our loan was a matured balloon) on a Fannie Mae loan and did a HELOC behind it. Or so we thought. The title company that did the closing, had a bunch of recordings that day and unwittingly had the county record the HELOC first, and seconds later time/date stamped the senior. All good, no problems until the loan went into default.
We put the HELOC into foreclosure to avoid it getting wiped out in the sale (The senior would have survived the sale). When we got the trustee sale guarantee back from the foreclosure trustee, it showed the HELOC in first lien position because of the page number and recording time.
Ultimately the borrower sold the property before sale so it was a non issue but had they not, and had we continued with default, if we did not restructure the foreclosure (difficult), we would have more than likely had to wait until sale, suffered a loss, then filed a title claim (Time...time...time...) to hopefully be made whole.