David purchases a home in Franklin County, Ohio using a conventional mortgage. He also takes out a home equity line of credit (HELOC) from a different lender two years later. If David defaults on both loans, which lender has priority?
Correct Answer
C) The first mortgage lender because their mortgage was recorded first
Under Ohio's recording statute, priority among mortgages is generally determined by the order of recording. The first mortgage recorded has priority over subsequently recorded liens. Since the conventional mortgage was recorded first, that lender has senior priority over the HELOC lender.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Predatory lending refers to unfair, deceptive, or abusive lending practices that impose unjustified terms on borrowers, often targeting vulnerable populations. It includes practices like excessive fees, inflated appraisals, and unnecessary refinancing.
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
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