Escrow & Title
A Vermont property owner has both a first mortgage and a second mortgage (home equity loan). If the property is foreclosed, which lien is paid first?
AThe second mortgage, as it was most recently recorded
BThe first mortgage (senior lien) is paid first; the second mortgage is paid only from remaining proceeds✓ Correct
CBoth mortgages are paid equally
DThe property taxes are paid last
Explanation
Lien priority in Vermont follows the general rule of 'first in time, first in right.' The first mortgage (senior lien) is paid from foreclosure proceeds first. The second mortgage (junior lien) is paid only if funds remain after satisfying the first mortgage and any senior liens such as property taxes.
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