Assume Bobby wants to buy a house priced at $150,000.He pays $50,000 down,and borrows $100,000 from First Bank.On January 2,Bobby gives First Bank a mortgage on the home for $100,000,but First Bank forgets to record the mortgage until August 1.On March 1 Bobby obtains a home equity loan of $100,000 from Second Bank.Bobby does not tell Second Bank that there is another loan outstanding on the house.Second Bank records a mortgage on the home on March 2.Bobby defaults on both loans and leaves town.Assuming the home can be sold for $150,000,who would be entitled to those funds,and why?

Question

Quizplus · Accepted Answer

The Answer of Assume Bobby wants to buy a house priced at $150,000.He pays $50,000 down,and borrows $100,000 from First Bank.On January 2,Bobby gives First Bank a mortgage on the home for $100,000,but First Bank forgets to record the mortgage until August 1.On March 1 Bobby obtains a home equity loan of $100,000 from Second Bank.Bobby does not tell Second Bank that there is another loan outstanding on the house.Second Bank records a mortgage on the home on March 2.Bobby defaults on both loans and leaves town.Assuming the home can be sold for $150,000,who would be entitled to those funds,and why?

Assume Bobby Wants to Buy a House Priced at $150,000