- February 13, 2017
- All Kentucky Issuing Offices
- UNDERWRITING - Priority of Buyer Judgment Liens vs. Purchase Money Mortgage
We have relied on the holding in Kentucky Legal Sys. Corp. v. Dunn, 205 S.W.3d 235 (Ky. App. 2006) to treat judgment liens against purchasers as subordinate to their purchase money mortgages. A new case, Hays v. Nationstar Mortg. LLC, NO. 2015-CA-000121-MR, rendered January 6, 2017 (attached), overturns the Dunn case.
The specific facts of the case did not involve a purchaser's lien, but rather a lien of the prior seller that had not been paid at closing. Though the facts are different than those in Dunn, the ultimate holding was to overturn Dunn. For that reason, all judgment liens against a prospective purchaser must be treated as having priority over the purchase money mortgage and must be paid. We will keep you updated should there be any further developments on this case.
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