On default,the first and second mortgagees may realize on the security of the land and building,rather than claim as creditors in the bankruptcy proceedings.

Question

Quizplus · Accepted Answer

This is true as first and second mortgage holders have a secured interest in the property, which means that if the borrower defaults on their mortgage payments, the mortgagees have the right to foreclose on the property to recover their debt. This security interest takes priority over unsecured creditors in the event of bankruptcy.

On Default,the First and Second Mortgagees May Realize on the Security