A Virginia homeowner defaults on a deed of trust. The trustee conducts a non-judicial foreclosure sale, and the property sells for $320,000. The following obligations must be satisfied from the proceeds: trustee's fees and advertising costs of $6,600, the outstanding first deed of trust balance of $275,000, and unpaid property taxes of $4,800 (which have priority over the deed of trust as a lien). How much surplus, if any, will be returned to the former borrower?
Correct Answer
A) $33,600
Total deductions: $4,800 (taxes) + $6,600 (trustee fees/costs) + $275,000 (first deed of trust) = $286,400. Surplus to borrower: $320,000 - $286,400 = $33,600.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
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