A mortgage placed upon property which already has two other mortgages existing upon it: for instance, a certain piece of real estate, supposed to be worth $15,000, has against it a first mortgage for $5,000 and a second mortgage for $3,000. The owner wishes to borrow $2,000 more, and finds some one who is willing to accept a " third mortgage," upon the same, for that amount, making the total mortgage indebtedness against the property $10,000. Imagine that the owner of the property is unable to pay the interest upon the "third mortgage " when due; in order for the holder of this mortgage to protect himself, he must foreclose the property under his own mortgage and pay the holders of the other two mortgages their due.

In taking a "third mortgage," one should have reason to believe that the property will, at any time during the life of his mortgage, bring at "forced sale" a price sufficient to pay off all three mortgages, because the first and second mortgages must be satisfied in full before the " third mortgage "holder receives anything.