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Mortgage Electronics Registration Systems, Inc. v. Jensen

2006 WL 337086 (N.J. Super. Ch. Div. 2006) (Unpublished)

LIENS; PRIORITY—By statute, a purchase money lien has priority over a child support lien and the purchase money lender doesn’t have to satisfy the child support lien.

A child support lien was recorded in 1999. In 2003, a judgment debtor executed a purchase money note and mortgage. Two years later, the holder of the mortgage filed a foreclosure action and the holder of the child support lien argued that the lien had priority over the mortgage. In New Jersey, by statute, child support liens “against real and personal property shall be subject to the same enforcement procedures as other civil money judgments except that no judicial notice or hearing shall be required to enforce the lien.” N.J.S.A. 46:9-8 states in relevant part: “[W]henever real estate situate in this state is or shall be sold and conveyed, and a mortgage is given by the purchaser at the same time, on the real estate sold, to secure the payment of the purchase money or any part therefore, such mortgage shall be preferred to any previous judgment which may have been obtained against such purchaser. (emphasis added).” The statute granting priority to purchase money mortgages “has been a fixture of N.J. law since 1820.” Case law has stated that “[t]heir special priority can be asserted against: (1) claims of dower curtsey by the purchaser’s spouse, (2) the lien of judgments, (3) mechanics liens, (4) mortgages executed before the purchase of the land, and (5) federal tax liens filed against the purchaser before he acquired title.” Consequently, the Court ruled that the purchase money mortgage took priority over the child support lien. In doing so, it rejected the judgment creditor’s argument that the following language in the mortgage constituted an agreement by the purchase money mortgagee to grant superiority to prior liens: “If Lender determines that any part of the Property is subject to a lien which may attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Borrower shall satisfy the lien or take one or more of the actions set forth within 10 days of the giving of notice.” According to the Court, this clause did not say that the child support lien had priority over the purchase money mortgage. It simply stated “that if the lender determines that the property is subject to a lien with priority, the borrower shall satisfy that lien.” According to the Court, the “clause [was] simply a hypothetical.”

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