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

Comments(2)

  • tbird5th March, 2006

    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.

  • Knead2Know6th March, 2006

    Thanks. I figured as much after my posting vanished.

    -CF

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