Full access allows:
- Solve all tests online without limits;
- Remove all advertisements on website;
- Adding questions to favorite list;
- Save learning progress;
- Save results of practice exams;
- Watching all wrong answered questions.
27. Which party has priority?
There is no applicable statute.
The buyer is now in default on both notes.
At the closing, the buyer executed a note to the seller for a portion of the purchase price, which note was not secured by a mortgage. The buyer then executed a second note, secured by a mortgage to the bank, applying the bank loan proceeds to the purchase price of the property. The bank had actual knowledge of the prior note to the seller. The bank promptly recorded its mortgage.
A seller and a buyer signed a contract of sale for improved real property. The contract contained a financing contingency for a certain percentage of the purchase price. The buyer obtained the requisite financing from a bank.
Comments (0)
There are no comments at the moment. If you found an error or think question is incorrect, tell everyone about it
Only signed in users can write comments
Signin
A is incorrect. The financing contingency was a condition of the sales contract, which the buyer performed. In this case, the sales contract does not affect whose interest will be given priority.
C is incorrect. Actual notice of a competing interest-holder is only applicable in the case of competing purchase money mortgages; here, there is only one.
D is incorrect. A purchase money mortgage has priority over a vendor's lien, even if the lien is first in time.