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First or Subordinate Lien?
by John Burnett, BOL Guru

Question: When doing my HMDA check, I am having trouble deciding which lien status to use. If the borrower already has a mortgage present, even if it's not through us, does this make ours a subordinate lien? I am trying to figure out how to decide if it's a first lien or a subordinate.

Answer:The first lien is held by the lender who is earliest on record at the registry of deeds or county courthouse or wherever mortgages or deeds of trust are recorded in your state. All other mortgages or deeds of trust are subordinate to the first lien (unless the first lien is subordinated to them in a special agreement).

The first and subordinate liens may or may not be held by the same lender.

The first lienholder gets paid first if the property is foreclosed. Subordinate lienholders generally follow in order of the recording of their liens.

First published on 2/21/05

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