Randall initially owned a piece of land called Blackacre that was worth $400 000.He borrowed $200 000 from Keir and created a mortgage over Blackacre in favour of Keir.Randall then borrowed $100 000 from Ian and created a mortgage over Blackacre in favour of Ian.Randall has not repaid any part of either debt.Because of a recession,the value of Blackacre has dropped to $90 000.Which of the following statements is TRUE?

Question

Quizplus · Accepted Answer

The order of priority between Keir and Ian will depend on factors such as any priority agreement entered into by the mortgagees or the order of registration in a land title system. Therefore, it is possible that Ian will be treated as the initial mortgagee and Keir as the subsequent mortgagee, depending on these factors. Option B is incorrect because both Keir and Ian are mortgagees, not mortgagors. Option C is incorrect because the amount each mortgagee will receive upon a default and sale of the property will depend on the order of priority and any other relevant factors. Option D is unrealistic since it is unlikely that a third mortgagee would lend money to someone who already has two existing mortgages on the property. Option E is also incorrect since having multiple mortgages on the same property is not necessarily mortgage fraud.

Randall Initially Owned a Piece of Land Called Blackacre That