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Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 55467
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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I got a first mortgage from B of A. The trust deed was never

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I got a first mortgage from B of A. The trust deed was never registered on title by them, and the mortgage was subsequently bought by Fannie Mae . I want to get a second, as I have alot of equity in my house a need some repairs/ remodeling done. If I get a loan now the second will attach before the first trust deed. Am I responsible to the holder of the first trust deed which was never recorded for their lack of placement against the property?
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good morning. That's not your responsibility; rather, it's the bank's responsibility to get their trust deed recorded. Since they've failed to do so, the second lienholder's lien is going to get priority over the first lienholder if the second lienholder records first. The first lienholder may very well have a cause of action against the title company, but it would not have any claim against you.

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Customer: replied 4 years ago.

Thank you for your prompt reply! The obvious follow up question to your answer is could the current note holder execute against the property without paying off senior liens if they were not paid?

You're welcome. The liens must be paid in the order of their recorded priority. So, if the second lienholder records first, if the current note holder then were to move against the property, the second lienholder would have to get paid in full before the current lienholder would be entitled to any proceeds.
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Richard and 2 other Real Estate Law Specialists are ready to help you