Mortgage Priorities

Question 1

What are the priorities regarding mortgages?

Answer 1

1. Priority is established according to the jurisdiction’s recording statutes.
2. Mortgagor receives nothing until all existing mortgages have been satisfied.
3. All mortgages must be recorded. If NOT recorded, the mortgage is skipped.
   (a)Still enforceable but lost its place in line.

Question 2

Senior Mortgage

Answer 2

Superior/ First Mortgage

Question 3

Junior Mortgage

Answer 3

Inferior, later and numbered mortgages (2,3, . . )

Question 4

What happens when a junior mortgage is foreclosed?

Answer 4

The property is sold subject to the senior mortgage. Sale price should be fair market value minus the senior mortgage.
Always senior mortgage first

Question 5

What happens when a senior mortgage is foreclosed?

Answer 5

(a)So, the mortgage holders may claim proceeds in excess of those needed to satisfy the senior mortgage, according to their recording order.

2. Senior mortgage is only responsible for their mortgage, not any junior mortgages.