Real Property · Lesson 05
Mortgages
這一課問的是：多個按揭並存時，誰先誰後？拍賣後哪些權益會消滅？借款人能否在賣出前贖回？
Actor
Act
Object
Standard
Consequence
Visual Scene · the picture in your head
Issue. What is the priority of competing mortgages, what survives foreclosure, and may the borrower redeem before sale?
這一課問的是：多個按揭並存時，誰先誰後？拍賣後哪些權益會消滅？借款人能否在賣出前贖回？
Core Terminology · 7 must-know
Tap a card to flip and reveal the meaning.
mortgage
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Security interest in real property given to secure a debt.
按揭：以不動產擔保債務之擔保權益。
mortgagor
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Borrower granting the security interest.
借款人。
mortgagee
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Lender taking the security interest.
貸款人／按揭權人。
first-in-time
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Earlier recorded mortgages take priority over later ones.
先錄者先。
foreclosure
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Process by which the mortgagee enforces the security interest.
拍賣。
equity of redemption
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Mortgagor's right to redeem prior to foreclosure sale.
贖回權。
deficiency judgment
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Personal judgment against mortgagor for unpaid balance after sale.
欠額判決。
Issue · what this lesson is really about
What is the priority of competing mortgages, what survives foreclosure, and may the borrower redeem before sale?
這一課問的是：多個按揭並存時，誰先誰後？拍賣後哪些權益會消滅？借款人能否在賣出前贖回？
Trigger words & phrases that should flag this issue:
mortgagedeed of trustforeclosurejunior liensubordinationredemption
Expression Bank · how lawyers actually say it
Six function → sentence patterns. Use these in essay applications.
| Function | English sentence | 中文 |
|---|---|---|
| State priority | Mortgages are prioritized first-in-time, first-in-right, subject to recording acts. | 按揭以先錄優先。 |
| Apply foreclosure | Foreclosure extinguishes junior interests but not senior ones. | 拍賣消滅後位權益，不消滅前位。 |
| State redemption | The mortgagor retains an equity of redemption until the foreclosure sale. | 借款人於拍賣前享贖回權。 |
| Address deficiency | After sale, the mortgagee may pursue a deficiency judgment in some states. | 部分州容許欠額追訴。 |
| Note title vs lien | Lien-theory states view mortgage as a lien; title-theory states see legal title in lender. | Lien 說與 Title 說。 |
Rule Sentence · the workhorse
Mortgages are prioritized first-in-time, first-in-right, subject to the recording acts; foreclosure of a senior mortgage extinguishes junior interests but leaves senior interests intact, and until the sale the mortgagor retains an equity of redemption.
Sentence Anatomy · 5 roles, 5 colors
Every rule sentence breaks into five visual roles.
Actor 行為人mortgagor (borrower)借款人
Act 行為granting a security interest設定擔保
Object 對象the real property不動產
Standard 法律標準priority + recording acts順位 + 錄案法
Consequence 後果mortgagee may foreclose to satisfy debt按揭權人可拍賣求償
Casebook Snapshot · a real American case
Murphy v. Financial Development Corp.
Holding. A mortgagee conducting a foreclosure sale has a duty of good faith and due diligence to obtain a fair price. Where the lender sold the property at the courthouse for $27,000 on a $54,000 debt without adequate advertising, and resold it a few months later for $38,000, the lender breached its duty; damages were assessed at the fair value differential.
Why it matters. Foreclosure is not a license to dump the collateral. Lenders owe procedural good faith and a reasonable effort to get a fair price.
按揭權人於拍賣中有合理求得公平價之善意義務。
Common Mistakes · what trips students
✗ foreclosure 消滅所有 lien。
✓ Senior liens survive foreclosure.
前位 lien 不消滅。
✗ 贖回權永遠存在。
✓ Equity of redemption ends at sale; statutory redemption may extend.
賣出時消滅；法定贖回可延長。
✗ borrower 拍賣後就沒事了。
✓ Deficiency judgment may follow if state allows.
部分州可追欠額。
✗ subordination 必須通過法院。
✓ Subordination is contractual.
Subordination 為合約安排。
Mini IRAC · build the Application
Issue. If M1 (senior mortgage), M2 (junior mortgage), and M3 (most junior mortgage) are all recorded in order, and M1 forecloses, what becomes of M2 and M3?
Rule. Foreclosure by a senior mortgagee extinguishes junior interests but leaves senior interests intact.
Application (model). M1 is the most senior mortgage on the property; M2 and M3 were recorded later. When M1 forecloses, the sale wipes out all interests junior to M1. Because foreclosure by a senior mortgagee extinguishes junior interests but leaves senior ones intact, the fact that M2 and M3 were both recorded after M1 means both are wiped out by M1's foreclosure (though they remain personal debts and may pursue surplus proceeds).
Pick the right element for each blank:
g1.
g2.
g3.
Conclusion. Therefore, M2 and M3 are extinguished as liens, while M1 receives sale proceeds; surplus, if any, flows to M2 then M3.
MBE Check · multiple choice
B borrows $300k from X (recorded mortgage), then $100k from Y (recorded mortgage). Y forecloses. What happens to X's mortgage?
Mini Essay · write the Application paragraph
Facts. M owes Bank A $300,000 secured by Mortgage 1 (recorded 2010) on Greenacre. In 2015 M borrows another $80,000 from Bank B, secured by Mortgage 2 (recorded 2015). In 2020 M takes a $50,000 home equity loan from Bank C, secured by Mortgage 3 (recorded 2020). M defaults; Bank A forecloses. Sale produces $400,000.
Call. How are the foreclosure proceeds distributed, and what happens to Bank B's and Bank C's mortgages?
Practice Drill · tap to build the rule
Drop the chips here in correct order:
Tap chips to add → tap chips in the target to remove: