A Connecticut property sells at a foreclosure by sale auction for $420,000. The outstanding mortgage balance is $380,000, and court-approved foreclosure costs total $8,000. After paying the mortgage debt and foreclosure costs, what is the surplus amount available for distribution to the mortgagor or junior lienholders?
Correct Answer
B) $32,000
Surplus = Sale Price − Outstanding Mortgage Balance − Foreclosure Costs. $420,000 − $380,000 − $8,000 = $32,000. In a Connecticut foreclosure by sale, after the senior mortgage debt and approved costs are paid from the auction proceeds, any remaining surplus is distributed to junior lienholders in order of priority, and any remaining balance goes to the mortgagor.
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Related Topics & Key Terms
Key Terms:
Related Concepts
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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