§ 8452 Payment Bond Lien Priority

• •If you have a loan on your house (mortgage), and someone else has a claim on it for work they did, the loan usually comes first.
• •But if you record a special payment bond before the work is done, your loan can stay first in line.
• •The bond must mention your loan and be worth at least 75% of your loan amount.

You take out a $100,000 loan to buy a house. Later, a contractor does $20,000 of work on your house but doesn’t get paid.

Normally, the contractor’s claim might come before your loan. But if you recorded a payment bond for at least $75,000 (75% of your loan) before the work started, your loan stays first in line.