James and Debra Reid purchased a home for $623,000 in January 2014. They put down $62,300 and financed the remainder with Fifth Third Bank. Fifth Third Bank recorded its mortgage on February 1, 2014. On March 31, 2014, the Reids purchased a swimming pool and the pool contractors, Cristoria Pools, financed the construction for $45.000. Cristoria recorded a second mortgage on the property on April
15, 2014. On December 15, 2014, the Reids sold their house to the Griffins for $720,000. The Griffins put $120,000 down and agreed to pay the Reids for the existing mortgage in wrap-around. The mortgage balance at the time of the sale was $619,000. The balance on the Cristoria mortgage was $42,000. On August 15, 2015, the Griffins defaulted on their payments. The Reids had already purchased another home and were unable to make the payments on the home. Fifth Third Bank foreclosed on the mortgage. ?If there is only $600,000 left for distribution to creditors, what happens to Cristoria's loan?
A)?Cristoria can collect the pool loan from either the Griffins or Fifth Third Bank
B)?Cristoria will have to pursue a personal judgment against the Reids
C)?Cristoria has personal judgment rights against both the Griffins and the Reids
D)?Secondary mortgages are discharged upon foreclosure of the first mortgage
B
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