hard · National Real Estate Exam property-ownership
Three siblings hold title as joint tenants with right of survivorship. Sibling A executes a mortgage on her undivided interest in a lien-theory state; Sibling B, without telling the others, signs a deed conveying his interest to a buyer but the deed is never delivered before B dies; Sibling A then dies with the mortgage still outstanding.
Immediately after A's death, what is the state of title and the mortgage?
- B's undelivered deed severed nothing, A's mortgage did not sever the joint tenancy in a lien-theory state, so A's interest passes by survivorship to the remaining joint tenants free of the mortgage lien
- B's signing of the unrecorded deed severed his one-third interest into a tenancy in common, and A's subsequent mortgage likewise severed her own interest, leaving three wholly distinct tenancies in common now
- A's mortgage severed her one-third interest even in this lien-theory jurisdiction, so that share passes down to her estate subject to the mortgage while B's share had already passed to the buyer
- All three interests remain joined together in joint tenancy, and A's death simply extinguishes the outstanding mortgage lien entirely as her interest and title consolidate fully in the two survivors
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