Second Lien on HouseA second lien on the house
A lot of real estate landlords have several Mortgages on their real estate, usually first and second term overdrafts. Hypothecaries and other pledges on real estate securities take their position on these securities according to the ranking date defined by the date of registration of a lien. Thus, the hypothec that is quoted first has precedence over later hypothecaries.
But any pledgee can exclude a real estate for due funds, regardless of where they are in the ranking lists. Lien is a communication to the outside that a real estate proprietor owe the pledgee sums. Mortgages are noted on title deeds. It gives the pledgees the right to obtain back the monies due to them, if necessary by enforcement.
From a legal point of view, all owners of security rights over real property can compel a real estate object to execution, regardless of their length of service in the case of real estate deeds. It is much more difficult for a second mortgage bank to enforce a levy of execution, however. This is because older pledgee creditors are the first to be remunerated, with younger pledgee creditors sometimes being without sales revenue. A further possibility is that the second borrower buys up the first borrower.
In this way, a second lien owner can secure his own length of service when it comes to enforcement. Yet, second lien mortgagors could not buy the first defaulting borrower's mortgages if those characteristics are not sufficiently valuable. a) The second lien mortgagor could not buy the first lien borrower's property if those characteristics are not sufficiently profitable. Secondly, lien owners who pay out the first loans of their delinquent borrower and then exclude both loans want to recover cash, not forfeit it.
A further way that is open to second mortgage lien owners is the monetary judgement. Obtaining a judgement from the courthouse allows the mortgage lender to search for repayment from the landlord-debtor through various means. For example, a creditor who has a judgement on a debtor's salary may request an attachment of the debtor's salary. Monetary judgements also allow in some cases to collect the creditors' liabilities.
Second-debt lien owners can also simply allow their mortgages to be sitting on the real estate assets of their delinquent borrower and accumulate when their borrower sells their real estate. Dependent on the condition, second lien owners can institute execution and then take the borrower to Court for any defects or adverse balance. California, for example, allows lien owners to use legal or adjudicated forced sales to prosecute post-enforcement borrower for any resulting defects.
Deficits or bad debts that remain after enforcement, however, are uncovered debts and can be compensated even if excluding lenders and their borrower make a joint decision. Nevertheless, a defect judgement can also be used by excluding lien bearers in order to seize the salaries of their debts.