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Case Citations [1] (Fall 2024)

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                            THE AMERICAN


                            LAW INSTITUTE



                                     Fall 2024 Citations



                PROPERTY 3D (MORTGAGES)



                          CHAPTER 7. PRIORITIES

§ 7.6 Subrogation

Ill.App.2022. Com. (e) quot. in sup. and cit. in case quot. in sup. After borrower defaulted on a loan that
it used to refinance a mortgage on its property and purchase a former co-owner's interest in the property,
lender filed a foreclosure action against borrower and creditor that obtained a subsequent judgment
against former co-owner, which was recorded before the loan transaction was recorded. The trial court
granted summary judgment for lender, finding that lender's later-recorded lien had priority over
creditor's earlier-recorded judgment lien. Affirming, this court held that lender was entitled to
conventional subrogation up to the amount due and owing on the mortgage it refinanced, not merely up
to the original principal amount borrowed. The court explained that, according to Restatement Third of
Property: Mortgages § 7.6, lenders that provided refinancing ordinarily desired and expected to receive
security with a priority equal to the mortgage being paid, even if they were aware of an intervening lien.
AS  1, LLC v. Celtic Home Solutions, LLC, 218 N.E.3d 1152, 1163.


















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          For earlier citations, see the Appendices, Supplements, or Pocket Parts, if any, that correspond to the subject matter under examination.

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