Xiao, an international student, purchased Whiteacre in 2008 when he first began his education in the United States.

Xiao, an international student, purchased Whiteacre in 2008 when he first began his education in the United States. In 2015, Xiao decided to attend law school and sold Whiteacre to Aaron for $500,000. Aaron did not record the deed. When Xiao was about to graduate, he was informed that he would have to pay off his $200,000 debt to the school before he could get his diploma and sit for the bar exam. Xiao convinced his classmate, Elle, to loan him the money in exchange for a note promising to pay her back and a mortgage document granting Elle a security interest in Whiteacre. Shortly thereafter, Xiao returned to his home country and stopped making payments on the note to Elle. Elle attempted to foreclose her security interest against Whiteacre. What is the likely result?

SELECT ONLY ONE SELECTION BELOW…..the last answer was wrong.

Xiao will be liable based on the note he gave to Elle.

Elle will be able to foreclose her security interest against Whiteacre in a Notice Jurisdiction.

Elle will not be able to foreclose her security interest against Whiteacre because Xiao’s mortgage document to Elle is invalid since he had already conveyed the “official” deed to Aaron.

Elle will prevail against Aaron and become the owner of Whiteacre in a Notice Jurisdiction.