Finance
In Texas, a 'purchase money mortgage' that a seller takes back as part of the sale price typically:
AHas priority over all existing liens
BIs a junior lien behind any institutional financing obtained by the buyer, unless specifically structured otherwise✓ Correct
CAutomatically forecloses upon the buyer's default on the institutional loan
DIs insured by TDHCA
Explanation
A seller carryback (purchase money note) typically takes a junior position behind any institutional first mortgage the buyer obtained. The seller takes second lien position as part of the sale transaction. The seller should be aware that if the buyer defaults on the first mortgage and there's a foreclosure, the seller's junior lien may be wiped out if the proceeds don't cover it.
Related Texas Finance Questions
- A Texas buyer qualifies for a Conventional 97 program. This means they can put down:
- Texas's 'Save Our Homes' (SOH) cap limits the annual increase in the appraised value of a homestead for tax purposes to:
- A Texas lender 'charges off' a non-performing loan. This means the lender has:
- Under the Texas Home Equity Loan rules, if a homeowner fails to make payments and the lender seeks to foreclose, the foreclosure must be through:
- The Texas Department of Housing and Community Affairs (TDHCA) administers the 'My First Texas Home' program, which provides:
- In Texas, a 'hard money' loan is characterized by:
- Under RESPA, a 'kickback' or unearned fee arrangement where a settlement service provider pays a referral fee to someone for steering business to them is:
- A Texas borrower who received a Predatory Lending TILA violation (like inadequate disclosure) may have the right to rescind the loan for up to:
Practice More Texas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Texas Quiz →