Silent Second
I saw this term applied as an answer to a question about a "phantom second". I am not familiar with either term, but the posting stated that a silent second is illegal. I am familiar with the idea of silent partners investing in property while remaining off title.
Is this the same thing? If not, would someone spell it out for me?
Thanks,
-CF
A silent second is a second lien made outside of closing that the 1st mortgage holder is unaware of.
In most cases, there is a reason for hiding it so the primary lender will give a better rate or terms. If so, this constitues fraud and would therefore be consider illegal.
Thanks. I figured as much after my posting vanished.
-CF