Escrow & Title
A Minnesota seller has a first mortgage of $150,000 and a second mortgage (home equity line) of $40,000. At closing, the proceeds must satisfy liens in which order?
ASecond mortgage first, then first mortgage
BFirst mortgage first, then second mortgage✓ Correct
CEqually split between both mortgages
DWhichever lender requests payment first
Explanation
Liens are satisfied in priority order at closing. The first mortgage has priority over the second mortgage/HELOC. All liens must be paid in priority order from closing proceeds. If there are insufficient funds to pay all liens, the first mortgage is paid in full before the second mortgage receives any funds.
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