Crucial Exams

Multistate Bar Examination Practice Question

A homeowner purchased a property and financed the purchase with two loans. The first loan came from a bank and was secured by a mortgage executed contemporaneously with the purchase of the property. The second loan came from a private lender and was also secured by a mortgage executed at the same time. Each loan was used to pay part of the purchase price, and both lenders properly recorded their mortgages; the private lender recorded its mortgage a few hours before the bank recorded its mortgage. The homeowner later defaulted on both loans, and the property was foreclosed. Assuming the jurisdiction follows the majority rule for purchase-money mortgages, which mortgage has priority?

  • The private lender's mortgage has priority over the bank's mortgage because it was recorded first.

  • The bank's mortgage has priority over the private lender's mortgage because a purchase-money mortgage always takes precedence regardless of recording.

  • The private lender's mortgage has priority because private lenders are treated differently under purchase-money mortgage rules.

  • The mortgages have equal priority because both were executed and recorded contemporaneously with the purchase of the property.

Multistate Bar Examination
Real Property
Your Score:
Settings & Objectives
Random Mixed
Questions are selected randomly from all chosen topics, with a preference for those you haven’t seen before. You may see several questions from the same objective or domain in a row.
Rotate by Objective
Questions cycle through each objective or domain in turn, helping you avoid long streaks of questions from the same area. You may see some repeat questions, but the distribution will be more balanced across topics.

Check or uncheck an objective to set which questions you will receive.

Wipe Score
Bash, the Crucial Exams Chat Bot
AI Bot