Foreclosure Lien order priority

[Khanh Tran]

Hi,

I am new to foreclosure investing, and i tried to analyze and study the title search. Here is the situation:

1) Buyer  bought a property and have two mortgages (Deed of Trusts) on the property from the same lender

2) Buyer decided to refinance with the new bank (a new Deed of Trust), but the new deed of trust said this is a renew or extension of the first lien.

3) The previous bank release the lien on the 1st mortgage.

In this situation, does it make the 2nd Deed of Trust become the first lien since it record before then 3rd Deed of Trust?

[Tom Gimer]

@Khanh Tran I don't see anything weird about that... it happens all the time.

And perhaps you didn't understand my comment about the auto-sub. If the new loan and the old 2nd meet certain criteria (basically the new loan being a rate and term refi of the 1st, the 2nd being fairly small, closing costs being low) then the 2nd could be automatically subordinated to the new 1st, regardless of the sequence they were recorded. Look into it.