August 27, 2012
- 366 Subrogation
- 366k31 Assignment or Benefit of Security or Incumbrance
- 366k31(4) k. Assignment or Benefit of Mortgage, Judgment, or Lien.
Under New York law, mortgagee is subrogated to senior lien, where funds of mortgagee are used to satisfy lien of existing, known incumbrance and, unbeknown to mortgagee, another lien on property exists which is senior to mortgage but junior to lien satisfied with mortgage funds, regardless of whether mortgagee has excuse for failure to discover intervening lien; purpose of subrogation is to prevent intervening lienor from converting mistake of mortgagee into magical gift for himself.
United States v. Baran, 996 F.2d 25 (2d Cir. 1993)
Suggested by Jill Bergquist, Principal Attorney Editor, Westlaw