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Commerce · Q534

Financial Management

Graduate and Post Graduate · Commerce · question 534

Q534

Second mortgages pledged against bond's security are referred as

A.
loan mortgages
B.
medium mortgages
C.
senior mortgages
D.
junior mortgages
Answer

Answer: Option D

Solution

Answer: Option D
Solution:
Second mortgages pledged against bond's security are referred as junior mortgages. A junior mortgage is a mortgage that is subordinate to a first or prior (senior) mortgage. A junior mortgage often refers to a second mortgage, but it could also be a third or fourth mortgage. In the case of foreclosure, the senior mortgage will be paid down first.