What is 1st lien vs 2nd lien?
Second-lien debt is borrowing that occurs after a first lien is already in place. It subsequently refers to the ranking of the debt in the event of a bankruptcy and liquidation as coming after first-lien debt is fully repaid. Another term for this type of debt security is junior or subordinated debt.
What is a first lien date?
33. First Lien Date: If applicable, the date a security agreement was signed with any financial institution/individual for the financing of the vehicle. 34. First Lienholder Name and Mailing Address: The lienholder’s name and mailing address. If there is no lien, indicate “NONE.”
What does 1st lien mean?
A First Lien Home Equity Loan (First Lien) is a mortgage product, meaning it’s a loan secured with real estate as collateral. However, First Liens are generally taken out when you’ve already purchased a home with a traditional mortgage.
Is second lien debt senior debt?
In fact, a second-lien loan is a form of senior loan because the second-lien lender takes full security on the same assets as the first-lien lender and will share with it in the recovery from such assets in a liquidation, either pari passu (ie, at an equal rate) or according to an agreed ratio.
Is your mortgage in 1st lien mortgage position?
A first mortgage is not the mortgage on a borrower’s first home; it is the original mortgage taken on any one property. It is also called First Lien. If the home is refinanced, then the refinanced mortgage assumes the first mortgage position.
What is a first lien letter?
First Lien Letter of Credit means any letter of credit issued under the Credit Agreement or any Additional First Lien Document. First Lien Letter of Credit means a Letter of Credit (as defined in the First Lien Credit Agreement) issued under and in accordance with the terms of the First Lien Credit Agreement.
Is senior debt first lien?
Senior debt is often secured by collateral on which the lender has put in place a first lien. Usually this covers all the assets of a corporation and is often used for revolving credit lines. It is the debt that has priority for repayment in a liquidation.
What is first lien and second lien?
The First Lien is the superior lien to be paid in the event of default. A second lien would be inferior in order of payment in the event of default. If the property is in a Planned Unit Development , they typically have an inferior lien on the property for the payment of Homeowners Association Dues.
Can a lien be placed on property for unsecured debt?
In many states, including California, unsecured creditors can become secured creditors and place a lien on your home. The process in California, and in many states, requires that the unsecured creditor file a lawsuit against you for the debt. The creditor cannot simply go and record a lien on your property for the debt owed.
What is lien creditor?
Lien creditor. A creditor that has gained an interest in property by means of attachment, levy, or some similar manner.
What is second lien loan?
Sometimes referred to as a last-out participation, a second lien loan is a debt obligation in which the lender has a secondary claim on any assets that held as liens on that debt. Typically, this type of situation exists when the lender is willing to impose a lien on an asset that already carries a lien from a different creditor.