Mortgage

The MBE loves the purchase-money mortgage (PMM) super-priority trap: a PMM (securing the buyer’s acquisition, from seller or third-party lender) takes priority over earlier-recorded judgment liens and other prior claims against the buyer. Between two PMMs, the seller-financed (vendor) PMM generally beats a third-party-lender PMM under the Restatement (Third) default (a real split exists; lenders often contract around it). The other reliable pattern tests theory of title: in lien-theory states (the majority) the lender holds only a security interest, so a co-tenant’s solo mortgage does not sever a joint tenancy, whereas in a title-theory state it may.

The classic error is confusing the priority question with the liability question (assume vs. subject-to). Another trap: a junior lienholder omitted from the foreclosure action keeps its interest, because foreclosure wipes out only juniors joined as parties; seniors survive regardless. Don’t conflate a mortgage with a bare encumbrance — every mortgage is an encumbrance, but it carries a foreclosure remedy a mere title restriction lacks. Memory hook: “Purchase-Money jumps the line.”