Estate Finance Notes
This class is dealing with issues of priority. Mortgages may be “replaced”.
The rule is that you lose priority only to the extent of material prejudice. Extensions of time are generally not materially prejudicial. Increases in interest rate or principal can amount to material prejudice.
Subrogation is appropriate to prevent unjust enrichment if the person seeking subrogation performs the obligation in full upon request from the obligor and reasonably expected to receive a security interest in the real estate with the priority of the mortgage being discharged and if subrogation will not materially prejudice the holders of intervening interests in the real estate.