In regards to lien priority, lenders prefer which position?

Lenders generally prefer the first priority position when it comes to lien priority. This preference stems from the fact that the first lien position has the highest claim on the property in the event of a default or foreclosure. When a borrower fails to meet their mortgage obligations, the lender holding the first lien has the first legal right to be repaid from the proceeds of any sale of the property.

In cases of foreclosure, the lender in the first position is paid before any other lienholders. This minimizes their risk and exposure, making it a more secure investment. By securing a first priority lien, the lender has the best opportunity to recover their loan amount because they will be the first to receive any proceeds from the sale of the property, maximizing their chances of being made whole.

In contrast, the second or third priority lien positions are at greater risk because they would only receive payment after the first lien has been satisfied. As such, lenders in those positions may face a higher likelihood of losing some or all of their investment if the property is sold for an amount insufficient to cover all liens. Not expressing a preference regarding lien position would suggest a lack of consideration for these critical financial implications, further underscoring the significance of the first priority stance among lenders.