(44) The Central District of California bankruptcy court provides a local form motion and order, (45) as well as a local form for an adversary complaint (46) to strip off an unsecured junior mortgage. Apparently, the selection of the proper form depends on the particular judge's preference.
(49) This distinction might also account for some underutilization of the junior mortgage strip off.
Absent the junior mortgage, the cash equivalent price would be $115,000 minus the difference between the amount owed on the assumed loan on the date of assumption and the present value of the assumed mortgage payments discounted at the market interest rate for conventional loans (10% in this example).
Although the solution becomes more complex when the junior mortgage is considered, the result is much more in line with market evidence.
The growth of mezzanine loans is due in part to the national rating agencies' belief that traditional
junior mortgage financing increases the likelihood and severity of default with the first mortgage.
(22.) Of course, if we assume there is a mortgage lien that was previously junior to a judgment lien and that the mortgage lien survives the foreclosure, and that the junior judgment lien is destroyed but immediately reattaches, then logic suggests that the previously senior judgment lien could lose priority to the previously
junior mortgage lien.
1st DCA 1993), the United States was the holder of several
junior mortgages all of which were foreclosed by the first mortgagee.
On the other hand, the claim of
junior mortgagees and judgment creditors can only be barred by foreclosure.
(2) In the event of foreclosure, the holders of
junior mortgages have a lower priority than the holder of a first mortgage.
* Opposing bills that would redefine title insurance to exclude
junior mortgages and home equity loans.
Although the availability of sources for this secondary financing is problematic, quality appraisals would nevertheless be an important consideration when
junior mortgages are required.
Potentially troubling are the "125 LTV loans,"
junior mortgages in which the borrower is allowed an aggregate mortgage debt totaling as much as 125 percent of the market value of the mortgaged property.
