Thread: What is a second?

When talking about mortgages a first mortgage is the mortgage on the property that was recorded first in time. A second is a mortgage that was recorded after the first, but before any others. A third mortgage is a mortgage that was recorded after both the first and second were recorded, but before any others. And on and on, there is no limit to the amount of mortgages that can be recorded.

A release of mortgage needs to be recorded to get rid of the mortgage.

It sounds as if the guy you are talking about was at a foreclosure sale, and thought he bought the property at foreclosure, but it was actually the second mortgage that was foreclosing. The first mortgage wasn't affected by the foreclosure, and so it is still in place.

In a foreclosure, any "junior" liens to the foreclosing lien (which a mortgage is - it's a "mortgage lien") are wiped away. There are exeptions to this. For example taxes, which are a lien on the property are never wiped out. They are actually in first position to all other liens. Also some municiple liens will not get wiped away.

This whole issue of buying a second, or other liens surviving the sale really only comes in to play when you are buying at a foreclosure sale. At these sales, you are on your own, it is your job to know what you are doing. So you need to do a title search. You can either do this yourself, or have a title company do it.

Most any other time you would buy a property, a title search will be done in the normal course of business, so it isn't a big concern. If you are borrowing money the lender will require the title search (and insurance).

But the bottom line I guess would be, any time you buy a property make sure a title search is done, or do it yourself, or you could have a rude surprise like the careless gentlman you mentioned.

Thanks a lot, this makes a lot of sense so as long as I stay always from foreclosures and run a title search I will be on the safe side.