In Ohio, a foreclosure action is filed against a property with three mortgages: a first mortgage of $200,000, a second mortgage of $50,000, and a third mortgage of $25,000. The property sells at sheriff's sale for $240,000. After paying the first mortgage balance and court costs of $5,000, how much is available for the second mortgage holder?
Correct Answer
A) $35,000
Sale proceeds: $240,000. First mortgage: $200,000. Court costs: $5,000. Remaining after first mortgage and costs: $240,000 - $200,000 - $5,000 = $35,000. The second mortgage holder receives $35,000 of their $50,000 lien. They have a shortfall of $15,000.
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Related Concepts
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
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