What is a Second Trust Deed?
A second trust deed is a claim against the property that has been recorded after the first trust deed. With a second trust deed you are in a second position of ownership. If for some reason the property needs to be sold. The first trust deed holder would be paid first because he is in first position. Then, if there is money remaining the second trust deed holder would be repaid. This is often a riskier form of investment. For example: A first trust deed valued at $300,000 has been recorded and then a year later a second trust deed is recorded for $100,000. In our example the property goes to foreclosure and is sold for $350,000. At the time of sale, the first trust deed holder would be paid $300,000. The second trust deed holder is in second position, and would only receive $50,000.
