FIRST MORTGAGE a MORTGAGE that has priority as a LIEN over all other mortgages. In cases of foreclosure the first mortgage will be satisfied before other mortgages. Also called SENIOR MORTGAGE. See JUNIOR MORTGAGE, SECOND MORTGAGE. Example: A property costing $100,000 is financed with a first mortgage of $75,000, a second mortgage of $15,000, and $10,000 in cash. lf the borrower DEFAULTS and the property is sold upon foreclosure for $80,000, the holder of the first mortgage will receive the full amount of the unpaid PRINCIPAL plus legal expenses. The second mortgage holder will receive any excess after the first mortgage has been satisfied.
FISCAL YEAR a continuous 12-month time interval used for financial reporting; the period starts on any date after January 1 and ends one year later. Example: For agencies of the federal government, fiscal year 2001 refers to the time between October 1, 2000 and September 30, 2001.