In 2019, Alice recorded a mortgage on her property in Lowell, Massachusetts. In 2021, Bob recorded a second mortgage on the same property without actual knowledge of Alice's mortgage. In 2023, Carol purchased the property from the owner and recorded her deed without actual knowledge of either mortgage, but a title search would have revealed Alice's recorded mortgage. Under Massachusetts's race-notice recording statute, which party has the strongest claim to the property?
Correct Answer
A) Alice, because her mortgage was recorded first and Carol had constructive notice of it from the public record
Under Massachusetts's race-notice recording statute (MGL Chapter 183), a subsequent purchaser prevails over a prior unrecorded interest only if they (1) record first AND (2) take without notice of the prior interest. Alice recorded her mortgage in 2019 — it was already in the public record. Carol, who purchased in 2023, is charged with constructive notice of all properly recorded instruments, including Alice's 2019 mortgage. Because Carol had constructive notice of Alice's recorded mortgage (a title search would have revealed it), Carol does NOT satisfy the 'without notice' requirement of the race-notice statute. Therefore, Carol cannot defeat Alice's senior recorded mortgage. Alice's first-recorded mortgage retains priority.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
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