In foreclosure, which lien is paid first?

Study for the Aceable Agent Finance Test. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

Multiple Choice

In foreclosure, which lien is paid first?

Explanation:
Lien priority governs how foreclosure proceeds are distributed. The most senior lien has the first claim on the sale proceeds, so it is paid before any junior liens. This is why the lien with the highest priority is paid first. The other options don’t fit because payoff isn’t based on the lien’s dollar amount, its recording date, or an equal split among liens. (Note: in some cases, tax liens or special assessments can have superpriority over other liens.)

Lien priority governs how foreclosure proceeds are distributed. The most senior lien has the first claim on the sale proceeds, so it is paid before any junior liens. This is why the lien with the highest priority is paid first. The other options don’t fit because payoff isn’t based on the lien’s dollar amount, its recording date, or an equal split among liens. (Note: in some cases, tax liens or special assessments can have superpriority over other liens.)

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