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Leasehold mortgage financing, by its nature, is a complicated form of lending. It involves the competing interests of landlords, their fee mortgagees, tenants and their leasehold lenders. From a transactional perspective, the challenge is to strike a balance among these competing interests. Leasehold mortgage financing can take several different forms, such as recourse and nonrecourse types. The financing may require subordinated or unsubordinated lien positions on the possessory interests of the ground lease. Although leasehold mortgage financing could be the subject of an entire treatise, this article is concerned solely with the perspective of a leasehold mortgagee interested in financing a ground lease. The mortgagee protections suggested here are not intended to be exhaustive but are meant to demonstrate the basic issues that are usually at the top of each leasehold mortgage lender's priority list.

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