Which mortgage is recorded first and has priority over other liens in case of default?

The correct answer is the first mortgage because it is the primary loan taken out to purchase or refinance a property and is recorded first on the property title. When a property goes into foreclosure, the first mortgage holder has the first claim over the proceeds from the sale of the property. This priority is important because it establishes the order of payment in the event that the borrower defaults on multiple loans secured by the property.

In contrast, a second mortgage, home equity loan, and revolving credit mortgage are all subordinate to the first mortgage, meaning they come into play only after the first mortgage has been satisfied. If the borrower defaults and the property is sold, the first mortgage lender will be paid first, and only after that are funds available to pay any subordinate liens. This priority structure protects lenders by ensuring that the risks associated with lending money are clearly defined and managed through the order of claims on the property.