2nd Lien Now 1st?
I have a friend who sold an apartment and took a $25k 2nd mortgage which is several years past due. I reviewed the recorded liens at the country recorder and it appears the bank who originally financed the 1st mortgage restructured the owners debt into a new larger mortgage.
Am I correct that the original 2nd lien is now the first lien if the original 1st mortgage was satisfied and my friend did not provide a subordination agreement?
If my friend were to foreclose, the likely course of action is the bank will buy him out correct? Otherwise, I would be happy to pay $25k for the 5 unit apartment with gross rent of $2,000 and a house which the buyer moved on site.
Thoughts?
Restructuring or a note modification will not change the lien position, however paying off the original mortgage with a new larger mortgage would not be authorized without permission from the 2nd.
It looks like the bank restructured the original 1st with other additional other legal descriptions at a larger dollar amount.