Finance
What is a 'second mortgage' and how does it relate to first mortgage priority in Delaware?
AA second mortgage has priority over the first mortgage if recorded first
BA second mortgage is subordinate to the first mortgage — in foreclosure, the first mortgage is paid before the second mortgage; second mortgages carry higher rates due to greater risk✓ Correct
CA second mortgage can only be taken by the same lender as the first mortgage
DSecond mortgages are prohibited in Delaware unless approved by the Real Estate Commission
Explanation
A second mortgage is subordinate (junior) to the first mortgage in lien priority. In foreclosure, the first mortgage lender is paid first; the second mortgage lender receives any remaining proceeds. Because second mortgages carry higher risk of non-recovery, they typically have higher interest rates. HELOCs are typically second mortgages.
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