Posted by Michael Morrongiello American Note on September 08, 1999 at 23:11:02:
A mortgage can secure multiple notes. However you may want to be carful as to having each note designated as “an equal dignity” note. That means in essence that a default in one of the notes may constitute a default in ALL of the notes or the mortgage. This might cause some complications for you if you are holding a larger note that is current and a much smaller note goes into default. That default may jeopordize your larger note as well.
Seek legal advice on this structure as it really is good preventative practice.
Can a Mortgage Secure Two Notes? - Posted by Barbara_NY
Posted by Barbara_NY on September 08, 1999 at 14:41:31:
I am closing a deal where we’ve already agreed to a note and mortgage in third position to cover seller’s (my) expenses. 5 year term with first payment due in two years.
It has now come to my attention that they want to do another note and mortgage for a small portion of the purchase price. I don’t mind doing it especially since they can pay it off in 3 months; however, I would prefer not to file two mortgages on the same property, due to the time to prepare the documentation, the recording fees and the trouble. So…
Can one mortgage secure two notes as long as it is clearly spelled out in the mortgage that it secures two separate notes with dates and amounts?