Purchase Money MOrtgages and Priority Forum

[MoneyMay]

So is the rule that a PMM will take priority over previous mortgages even though they are recorded, but will not take priority over subsequent mortgages automatically? (i.e., a PMM is treated like any other mortgage when determining priority for subsequent mortgages, and they only get special treatment when dealing with already recorded mortgages?).

[LeDique]

So is the rule that a PMM will take priority over previous mortgages even though they are recorded, but will not take priority over subsequent mortgages automatically? (i.e., a PMM is treated like any other mortgage when determining priority for subsequent mortgages, and they only get special treatment when dealing with already recorded mortgages?).

I'm not sure why you're making this distinction. It prevails over all others. It's a weird phrasing to say it prevails over subsequent mortgages like 'any other mortgage.' I mean, I guess that's true because it's first, but seems unnecessarily confusing to me.

[MoneyMay]

So is the rule that a PMM will take priority over previous mortgages even though they are recorded, but will not take priority over subsequent mortgages automatically? (i.e., a PMM is treated like any other mortgage when determining priority for subsequent mortgages, and they only get special treatment when dealing with already recorded mortgages?).

I'm not sure why you're making this distinction. It prevails over all others. It's a weird phrasing to say it prevails over subsequent mortgages like 'any other mortgage.' I mean, I guess that's true because it's first, but seems unnecessarily confusing to me.

This is what I am saying:

Someone gets a PMM. There's a an already recorded mortgage. The PMM gets priority over that already recorded mortgage. THis much is clear.

Say the PMM is NOT recorded and then ANOTHER mortgage (so this is the third mortgage) is taken out and IS recorded. The PMM does NOT have priority over the third mortgage b/c the PMM wasn't recorded, correct?

[mvpforme]

An unrecorded PMM will not prevail over subsequent BPFVs in a notice jx or BPFVs who record first in a race-notice jx (or anybody who records first a race jx).

[MoneyMay]

An unrecorded PMM will not prevail over subsequent BPFVs in a notice jx or BPFVs who record first in a race-notice jx (or anybody who records first a race jx).

Ty that's what I was wondering.

[TheFactor]

An unrecorded purchase money mortgage doesn't have priority over a prior recorded mortgage either, just fyi.

[mvpforme]

An unrecorded purchase money mortgage doesn't have priority over a prior recorded mortgage either, just fyi.

Where are you getting this from?

[TheFactor]

An unrecorded purchase money mortgage doesn't have priority over a prior recorded mortgage either, just fyi.

Where are you getting this from?

Think about it. It would be strange indeed if an unrecorded PMM had priority over a prior recorded mortgage but not a later recorded mortgage.

More generally, PMSIs have super-priority only if perfected. The only exception is a PMSI in consumer goods, which perfects automatically upon attachment. One "perfects" a mortgage by recording it, and the PMM super-priority rule doesn't apply until then.

[tsutsik]

Page 142 of the (long) Barbri Real Property outline:

"A PMM (purchase money mortgage), whether recorded or not, has priority over mortgages, liens, and other claims against the mortgagor that arise prior to the mortgagor's acquisition of title. However, PMM priority is subject to being defeated by subsequent mortgages or liens by operation of the recording acts or may be altered through a subordination agreement."

Barbri may be wrong, but at least they're explicit about it. They cite to the Restatement (Third) of Property and a Supreme Court case.

[tsutsik]

Sorry. I should say, the example they give is also of a prior recorded interest being defeated by a subsequent unrecorded PMM.

[lmr]

MBE barbri notes…
"If you are holder of pmm you are the favorite→will win out before all other mortgages even if they are recorded before you. But pmm priority will be defeated by subsequent mortgages or liens by operation of recording acts."