It is personally where I am considering moving to once my Junior in high school graduates from Wickliffe. 

After several years it dawned upon me  that the entity was only an extra expense and was feeding the lawyers, so I dumped the S-Corp and the junior LLCs and continued for decades w/o issues - - but that requires one to be extra viligant in keeping up with regulations AND to work well with people.

If the 2nd mortgage(junior lien) goes to foreclosure and there is a surplus of funds after being sold to the bidder, will the Senior lien receive any of the surplus?

Preferred equity is junior to mortgage debt but senior to owner or “common” equity.

If there are 3 people on a team Senior director, director, junior agent the split might be like this 25,000 senior director,15,000 director, junior agent 10,000.I am a principal broker working with the buyers one on one to find a good property to buy.

Not sure if there is a minimum sq footage requirement for a Junior ADU which I think may have been part of the issue. 

I think what would help me understand better would be clarity on what you mean by "behind/In Front", "Junior/Senior" "On a side note, if BofA foreclosed, they did wipe out any liens junior to them"; can you explain or give me an example of what "junior to them" means?

What investors need to decide is whether or not the abnormal and asymmetric split is a signal that the sponsor is junior and having a hard time raising the funds but-for this "feature." 

The junior agents that have little experience and knowledge usually work on anything as desperate to pay the bills.

You'll need to structure your offer $10k or so lower than your max price, and plan on chipping that $10k in to settle the differences between what the 1st will/can pay toward the junior liens verses what they are willing to accept.