Escrow & Title
In Florida, a 'purchase money mortgage' (PMM) that is seller financing has which priority characteristic?
AIt automatically has first lien priority
BIt has priority over other liens (including judgment liens) that attached after the deed was recorded, on the same date✓ Correct
CIt has no priority since it is not from a traditional lender
DIt is always subordinate to all existing liens
Explanation
A purchase money mortgage in Florida is considered to be created simultaneously with the conveyance of the deed. This gives it priority over judgment liens that attached to the buyer on or after the date of acquisition, since title and mortgage arose at the same time.
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
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