A creditor who has an existing judgment filed against a debtor in a county competes with a subsequently created mortgage to determine priority on real property. In a race-notice jurisdiction, which lien has priority?

A creditor who has an existing judgment filed against a debtor in a county competes with a subsequently created mortgage to determine priority on real property. In a race-notice jurisdiction, which lien has priority?

• A. The aunt's mortgage
• B. The creditor's judgment filed first
• C. The debtor's latest transfer
• D. The mortgage and judgment have shared priority

Answer: (B)

In race-notice systems, priority between liens depends on two things: who records first and who has no notice of the other interest when recording. The rule is that to win priority, a later claimant must both record first and have no notice of the earlier interest. Here, the judgment lien was filed (recorded) before the mortgage was created. To beat that lien, the mortgage would have to have been recorded first and the mortgagee must have had no notice of the judgment at the time of recording. Since the mortgage was created and recorded after the judgment, it cannot outrun the earlier recorded lien—even if there was no notice of the judgment. Therefore, the creditor’s judgment filed first takes priority over the subsequently created mortgage. The other potential interests (like an unrelated aunt’s mortgage or a debtor’s latest transfer) don’t alter this priority in this scenario.

In race-notice systems, priority between liens depends on two things: who records first and who has no notice of the other interest when recording. The rule is that to win priority, a later claimant must both record first and have no notice of the earlier interest.

Here, the judgment lien was filed (recorded) before the mortgage was created. To beat that lien, the mortgage would have to have been recorded first and the mortgagee must have had no notice of the judgment at the time of recording. Since the mortgage was created and recorded after the judgment, it cannot outrun the earlier recorded lien—even if there was no notice of the judgment. Therefore, the creditor’s judgment filed first takes priority over the subsequently created mortgage. The other potential interests (like an unrelated aunt’s mortgage or a debtor’s latest transfer) don’t alter this priority in this scenario.