After much thought and family discussion, we have decided to lend my sister money on her home. I was in the banking industry for about 8 years and I know a bit about writing the loan contract. The part I need help with is making sure I am second behind the her first mortgage. I've heard that I need to file with the state/county, but I'm not sure what I need to do. Has anyone here done this and if so, what is the process.
I appreciate your help.
@Greg Kimura , I am not a lawyer and do not know CA law. It is always best to contact a local attorney. Presumably, the original mortgage is already recorded. When you draw up your agreement you will need a promissory note that details the terms of the loan and a mortgage that allows you to foreclose if the terms of the loan are not met. When you record your mortgage at the County it will be dated after the first mortgage. That makes it a second. The first mortgage has priority.