A businessman mortgaged his residence for a bank loan used in his business. He later obtains a second loan from a private lender, again using the residence as security. The private loan’s note states the sole remedy on default is foreclosure. Several years later, the businessman defaults on the private loan. Can the private lender foreclose on the residence?

• A. No, because the bank loan is senior.
• B. No, because the borrower is not personally liable for the private loan.
• C. Yes, because the mortgagee may foreclose upon default.
• D. Yes, because the borrower took the land subject to the mortgage.

Answer: (C)