What about the scenario they still may consider their may be a question as to the
wherein the borrower borrows loan in default. A lender who validity of the “no junior liens
on a separate property and crosscollateralizes against allowed” as this may
crosscollateralizes against other properties may trigger technically interfere with the
the bank’s subject property? a foreclosure on all borrower’s business,
In this situation, the borrower properties they encumber in especially if the bank’s 1 st
is not attempting to strip out order to get the borrower to mortgage is extremely low.
equity from the original move toward a solution to For example, if the 1 st
property. The borrower may satisfy their loan that is in mortgage only has a balance
just be faced with the reality default [under their of 20% [either because the
that he cannot obtain a loan terms…usually for non borrow put a substantial
for the target property unless payment of mortgage amount down or the 1 st loan
he is willing to allow the new payments]. is so seasoned, that it has
lender [on property two] to
been amortized down to a
place this same loan on Public policy may state that low balance], there is very
property one for added a bank is not allowed to little risk of the bank not
security. Unfortunately, interfere with a borrower’s getting paid in full. Even if a
although this seems innocent business and force him not 2 nd is placed upon the
enough, if the bank finds out to purchase/borrow on other property, one has to question
that a junior lien was placed property that the bank has how the bank is impeded
on the property, [original one] no involvement. There also should the 2 nd start a foreclosure.
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