What happens to second and/or third mortgages and/or junior liens?
It is imperative that they are noticed for mediations. A lot of times the courts or the mediators do not inform the second and third of the mediation so they don’t appear. Also, simply because an agreement may be reached on the first doesn’t prevent the second or third from foreclosing. There are three primary considerations for any junior lien with regard to a first mortgage workout. One consideration is whether the junior lienholder is seeking collection. Often medical and similar judgment liens are imposed with the idea of collecting when the property is sold, but without taking overt collection action. The lien just sits there. So long as the existence of the lien does not interfere with reworking the first mortgage loan, it may not be necessary to deal with it immediately. Another consideration arises when the existence of the junior lien makes a first mortgage workout unworkable. For instance, take the case of a piggyback 80/20 first/second financing structure, where the amount o
