Re: PMM
Interesting question and answers.

I believe the old general rule regarding a purchase money mortgage pertained to a seller's lein in the form of a mortgage or deed of trust where the buyer(s) gave it to the seller in order to secure a lien against the property until the purchase price was paid in full. If that definition applies within a particular state it would seem to me that a lender who is accepting a current owner search as basis for title would want a mortgage or deed of trust to some other party than the seller, i.e. a strong financial institution that has more than likely required a full search prior to making the loan. Thereby, making the pmm analogous to a Quitclaim Deed from a family member for chain of title purposes.

On the other hand, a newer definition of purchase money mortgage or purchase money deed of trust has begun to emerge through both statutory and case law and the interpretation of the UCC where the purchase money mortgage or deed of trust can give the deed of trust priority over preexisting judgments and liens against the purchaser. I am uncertain as to which jurisdictions this rule has come to apply. I do know that there are cases in Southern 2nd,and Southeastern 2nd, as well as cases arising out of Minn. and NY, which hold some form of this view.

This new definition of purchase money mortgage or deed of trust requires a number elements be met before the mortgage or deed of trust is considered a purchase money deed of trust. One is that the instrument clearly say that it is a purchase money deed mortgage or deed of trust. Another is that the mortgage or deed of trust be a part of the same transaction as the recording of the deed. There seems to be some dispute as to the meaning of the term "same transaction." I am sure there are other elements that must be met and perhaps others here can provide them.

Well, I hope that I haven't muddied the waters. And I look forward to any comments y'all may have. I have really enjoyed reading the different interpretations from around the country. Here in Mississippi, I have asked several bankers about purchase money mortgages and gotten only blank looks. We are a deed of trust state and it's first recorded --- first priority. Well, with the exception of commercial property with proper UCC filings. But that is another question.



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