Bikeflip wrote:Yay video day. Good ole break.
Can someone explain question 55 to me, the notice statute question with the 2 mortgages and the kids? I got it right, but I have no idea how, and the video didn't help me understand it. Themis, I see you lurking.
I did the same thing, I just lucked into the answer and trying to figure it out drove me nuts afterwards. I can't guarantee this as being correct because to be honest I think at a point I had to cobble an explanation together to get myself to stop trying to figure it out:
This jurisdiction cites a notice statute, so when a lender gets a mortgage on property, but fails to record it, the mortgage isn't good against BFPs who take without notice of the prior existing mortgage. Because the lender never recorded the first mortgage, it isn't going to be any good against the couple who bought the house--they bought it without knowing it existed, and shouldn't have known it existed because it isn't in the title chain. Since the first mortgagee still has the security interest and so still holds the mortgage on the property, but lost the 'first priority spot', now the priority : The couple, first mortgagee.
The couple, however, bought the house with a purchase money mortgage--which automatically gets first priority. So their mortgagee is going to have priority over them and now we have: second mortgagee, couple, first mortgagee. When the couple died, their kids are going to take what the parents had by just stepping into their shoes. Ultimately when we plug them into the equation we end up with second mortgagee, children, first mortgagee.