Mortgage lien position

[Sandy Reddy]

Hello Everyone, I am new to BP, I am trying to understand about mortgage positions in a title search. Would be a great help if someone can provide details.

A property first mortgage is recorded on some x date
A second mortgage is recorded later after first mortgage recorded date.

Later When ONLY first mortgage is re financed. Would the refinanced lender have a new recorded date ?

And if the refinanced lender forecloses the property, and up for sheriff sale, does the winning bidder responsible to the second mortgage. Whenever first mortgage is re financed does the recorded date change in the title.

[Chris Mason]

Originally posted by @Sandy Reddy:

A property first mortgage is recorded on some x date 

A second mortgage is recorded later after first mortgage recorded date.

Later When ONLY first mortgage is re financed. Would the refinanced lender have a new recorded date ?

 Generally, the 2nd mortgage lender will have to consent to "re-subordination" or the new first lender will not do it, because the new first lender is going to want to be in first position. If there is sufficient equity, many 2nd mortgage lenders are perfectly OK with this. Or they might say no. Up to them.

In the event of a distressed sale, the liens are paid off in order. Anyone at the bottom of the list that isn't paid in full, tough cookies and/or this is something the title company needs to address before close of escrow. Ensure that your title insurance policy does not "exclude" any existing mortgage lien(s) from their policy (it is normal for them to exclude things like IRS liens if you don't pay your taxes, garbage liens if you don't pay the garbage man, etc).