Geez Helen, I don't know. What do you think?

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Super Priority - Purchase Money Financing

Posted by Travis-Ca on March 31, 2004 at 10:58 PM

In Reply to: In order of recording... posted by Ward-CA- on March 30, 2004 at 7:11 AM

: : In 1993 AJ is recorded against A for credit card debt
: : In 1998 AJ is recorded against A for back child support
: : In 2000 A buys house and judgments attach

: : In what order do they attach?

: =================

: Jenv,

: Normally, the judgments would not attach to the house since the lender wouldn't want their loan to be junior to two existing, senior recorded abstracts of judgment (AJ). The lender would insist the AJ's be paid off prior to recording their loan.

: But, let's assume that A pays all cash for the house, and so doesn't have a loan involved. Then the AJ's would automatically, by operation of law, attach to the title of the house, in the order of when they were recorded. There's no super priority situation amongst judgments.

:
: Hope this helps.

There may not be any super priority amongst judgments, however purchase money loans do have a sort of super priority. As indicated by CC §2898 (a) Purchase money loans are senior to all pre-existing liens against the individual purchaser, including prior recorded Abstracts of Judgments. So in the above example, assuming “A” borrows money to facilitate the purchase of the real property, the prior recorded judgments would actually be junior in position to the more recently recorded purchase money loan. If later the purchaser takes out a home equity line or any other type of financing, it would be junior in position to the recorded judgments.

Travis




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