Barton Owns a Piece of Land Called Finacre

question 25

Multiple Choice

Barton owns a piece of land called Finacre.On August 24, when the property was worth $1 000 000, he borrowed $200 000 from Alpha Bank and granted a mortgage over Finacre as security for repayment.Alpha registered its interest on September 18.On September 16, Barton borrowed $800 000 from Omega Bank.He granted another mortgage over Finacre as security.Omega registered its interest on September 17.The economy then collapsed.Barton has not repaid a cent on either loan and he has defaulted on both.The value of Finacre dropped to $500 000.If Finacre is subject to sale, which of the following statements is most likely to be TRUE?

• A)Regardless of which bank registered first, Alpha has priority over Omega because Alpha's mortgage was created first.
• B)Alpha has priority over Omega as long as Alpha was the first bank to notify Barton that its interest was registered.
• C)Neither bank will receive full repayment of its loan.
• D)Barton borrowed four times as much from Omega as from Alpha.The sale proceeds will be distributed in the same proportion.Omega will receive $400 000 and Alpha will receive $100 000.
• E)If either bank receives less than full repayment from the sale proceeds, it is entitled to compensation from the assurance fund.

---

Definitions:

Spongy Bone

A type of bone tissue with a porous structure, found at the ends of long bones and in the inner layers of other bones, facilitating movement and shock absorption.

Compact Bone

A dense and hard type of bone tissue that makes up the outer layer of bones, providing strength and structure.

Dense Bone

Dense or compact bone is a hard, outer layer of bone that provides strength and protection.

Spongy Bone

A type of bone tissue that has a porous structure, providing flexibility and acting as a shock absorber within bones.