In one sentence
Financing secured by a pledge of the equity in the property owner, not the property itself, sitting between the mortgage and the sponsor's equity.
The longer version
Because the collateral is the ownership interests, a mezzanine lender's foreclosure is a UCC sale of equity, faster than a mortgage foreclosure. The senior lender's consent and an intercreditor agreement make the structure work.
Mezz fills the gap between what the senior will advance and what the sponsor wants to invest, at a price that reflects its position.
Keep reading