Homeowner a Closed on His Property (A Two-Acre Lot) on May

Homeowner A closed on his property (a two-acre lot) on May 30, 2012. First Federal (FF) financed the purchase and recorded a mortgage on the lot on that same day. Unbeknownst to A and FF, Forest Excavators (FE) had removed two trees from the property and had several pieces of equipment stored on the property. A had contracted with FE for the clearing of the lot so that he could begin construction. FE filed a lien on April 15, 2013, five days after it completed its clearing work. A defaults on his mortgage on May 1, 2013. At the time of default, he owes $229,000. FE is also owed $7,500. Sale of the lot brings $200,000. How will the $200,000 be distributed?

A) The $200,000 goes to FF because its mortgage was recorded before FE's lien
B) The $200,000 goes to FF because mortgages take priority over mechanic's liens
C) $7,500 goes to FE with the remainder to FF
D) Because FE began construction before the lot transaction closed, it can collect nothing