Thomas holds a recorded first mortgage on a Genesee County property. The owner later grants a second mortgage to a private lender, which is also recorded. The owner then defaults. A judgment creditor who obtained and recorded a judgment lien after both mortgages were recorded seeks to enforce the lien. Which of the following correctly describes the priority order of these claims under Michigan recording law?
Correct Answer
A) First mortgage, second mortgage, judgment lien — because priority follows the order of recording under Michigan's race-notice statute
Under Michigan's race-notice recording statute (MCL 565.29), priority among competing interests in real property is generally determined by the order of recording — 'first in time, first in right' — provided each subsequent claimant recorded without notice of prior unrecorded interests. Thomas's first mortgage was recorded first, the second mortgage was recorded second, and the judgment lien was recorded last. Therefore, the priority order is: (1) first mortgage, (2) second mortgage, (3) judgment lien. This principle governs foreclosure proceeds distribution.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The bundle of rights describes the rights associated with property ownership, allowing owners to use, control, enjoy, exclude others from, and dispose of the property.
Community property is a form of ownership recognized in certain states where property acquired during marriage is considered equally owned by both spouses, regardless of who earned the money or whose name is on the title.
Condominium ownership involves owning a unit of airspace within a multi-unit building plus an undivided interest in the common elements shared with other unit owners. Each unit is separately taxed and financed.
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