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How is a mortgage's priority determined?

Bar Exam Prep Real Property Security Interests in Real Estate How is a mortgage's priority determined?
😀 Real Property • Security Interests in Real Estate PROP#223

Legal Definition

Generally, a mortgage's priority is determined by the time it was placed on the property.

Plain English Explanation

People can take out multiple mortgages on a property. Since each mortgage gives someone the right to foreclose, the law needs a way to figure out who gets first dibs and who has to wait in line to get paid. Generally speaking, a mortgage's priority is first-come first-serve. In other words, each additional mortgage has a lower priority than a mortgage placed before it.

Related Concepts

How do states treat a mortgage without a note? How do states treat a note without a mortgage? How may a party be a holder in due course of a note? In lieu of foreclosure, what do many installment contracts prefer and how do courts address this alternative? Under which theories may a mortgagee take possession of a property and begin receiving rents before foreclosure? What are the 5 types of security interests in real estate? What are the benefits of the holder in due course status? What are the limitations of a junior interest? What are the methods of transferring a note? What interests does a foreclosure destroy? What is a deficiency judgment? What is a due on sales clause? What is a foreclosure? What is an installment land contracts? What is a receivership? What is a redemption in equity? What is a statutory redemption? What is the distribution order of proceeds from a foreclosure? What is the result of a grantee assuming the mortgage? What liabilities are associated with a mortgaged property that is transferred to another party? What occurs in intermediate theory states? What occurs in lien theory states? What occurs in title theory states? What results from a party purchasing a foreclosed property subject to a senior interest? What security interests exist under a absolute deed? What security interests exist under a deed of trust? What security interests exist under a installment land contract? What security interests exist under a mortgage? What security interests exist under a sale-leaseback? Who may transfer their interest in a mortgage?
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