My son has run into some financial difficulties and he is asking me for a loan and he says he will give me a mortgage on his property.  Will I be secured?
     

The mortgage that you have on the property will be junior to any existing mortgages or other liens.  If your son is having financial difficulties and he is having problems paying his first mortgage then, even though you may have a lien, you may not have much security if in fact there is not enough equity in the property. 

Given the number of foreclosures that are going on now and the large number of properties on the market, it is unlikely that you will be able to obtain your money back in the event that the first mortgagee forecloses on the property.  If the mortgagee does foreclose on the property, that wipes out your lien.  If the bank gets more at the sale than is due it, then there will be a "surplus" and you may be entitled to be repaid the funds that you lent your son from that surplus.  However, there may be other lien holders as well.  In any event, the lender will probably bring what is called an "interpleader action" in court which will take time even if you are entitled to all or some portion of the surplus created by the sale.

If you have questions about this or any other real estate matter, please contact Tom Bennett at (617) 531-6574 or tvb@barronstad.com.