Finance
What is a 'second mortgage' (junior lien) and how does it affect priority in Nevada foreclosure?
AA second mortgage always has priority over a first mortgage
BA second mortgage is a loan secured by real property that is subordinate in priority to an existing first mortgage; in Nevada foreclosure, the first mortgage is paid before the second — if proceeds are insufficient, the second mortgage holder may be wiped out✓ Correct
CSecond mortgages are illegal in Nevada
DA second mortgage is required for all purchases above $500,000 in Nevada
Explanation
In Nevada, lien priority follows 'first in time, first in right' — the first recorded mortgage has superior priority. A second mortgage (HELOC, equity loan, seller carryback) is subordinate. In a foreclosure where the first mortgage balance exceeds the property value, the second mortgage holder may receive nothing — their lien is 'wiped out' by the senior foreclosure. Second mortgage holders face significant risk in declining markets, as Nevada experienced severely during 2008-2012.
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