A first mortgagee is the lending entity or individual whose lien on a property takes precedence over all other liens. Sometimes, a homeowner may take out a second mortgage on their home to finance a significant expenditure, like a renovation. In this case, the homeowner is responsible for paying both their primary and secondary mortgages simultaneously. In a default, the first mortgagee would sell the property and use the proceeds to cover the outstanding mortgage balance. Any remaining funds would be available to the second mortgagee.