Created: Friday, 11 September 2015 13:38
by Natalie Lorenz, Associate
A scenario that often arises when a bank refinances a customer’s mortgage from a different lender is that intervening liens have been placed on the mortgaged property. For example, a customer purchases property for $200,000 with a loan from Bank A, which obtains a mortgage on the property in the same amount. Then the customer obtains a second loan for $50,000 from Bank B to pay for her son’s education, and gives Bank B a lien on the same property as collateral. After a few years, the customer decides to go to Bank C to refinance the loan from Bank A. Bank A’s loan is paid off, and its mortgage is released, and Bank C then obtains a mortgage on the property instead. However, Bank B’s lien remains on the property.
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