How is mortgage priority determined at closing?

How is mortgage priority determined at closing?

• A. Order of recording and satisfaction determines priority.
• B. Priority is determined by mortgage amount.
• C. Priority is set by the seller.
• D. Priority is based on the loan's maturity date.

Answer: (A)

Mortgage priority at closing is determined by the order in which liens are recorded and later satisfied. The lien recorded first generally has priority over later liens, so it gets paid first from the sale proceeds or any proceeds available if foreclosure occurs. The loan amount or maturity date doesn’t set priority, and the seller doesn’t determine it. At closing, the titles and recorded liens are checked to establish this ranking, and funds are allocated accordingly. This is why the correct approach is that priority comes from the order of recording and satisfaction.

Mortgage priority at closing is determined by the order in which liens are recorded and later satisfied. The lien recorded first generally has priority over later liens, so it gets paid first from the sale proceeds or any proceeds available if foreclosure occurs. The loan amount or maturity date doesn’t set priority, and the seller doesn’t determine it. At closing, the titles and recorded liens are checked to establish this ranking, and funds are allocated accordingly. This is why the correct approach is that priority comes from the order of recording and satisfaction.