Travis mortgages his house to a financing firm called Smith & Sons for $200,000.Smith & Sons fails to record the transaction in the local county office.However,it files a financing statement to perfect its security interest on collateral.Without revealing the details of his prior mortgage,Travis uses the same house to secure an additional $150,000 from Cooper Associates one year later.Cooper Associates too files a financing statement but it is a year later than that of Smith & Sons' financing statement.In this case,which creditor has the priority to claim interest in the collateral?

Question

Quizplus · Accepted Answer

The Answer of Travis mortgages his house to a financing firm called Smith & Sons for $200,000.Smith & Sons fails to record the transaction in the local county office.However,it files a financing statement to perfect its security interest on collateral.Without revealing the details of his prior mortgage,Travis uses the same house to secure an additional $150,000 from Cooper Associates one year later.Cooper Associates too files a financing statement but it is a year later than that of Smith & Sons' financing statement.In this case,which creditor has the priority to claim interest in the collateral?

Travis Mortgages His House to a Financing Firm Called Smith