A property in La Crosse, Wisconsin sells at a sheriff's foreclosure sale for $175,000. The outstanding mortgage balance is $148,000, court costs are $4,000, and attorney's fees are $3,000. After all lender costs are paid, how much surplus, if any, remains to be distributed to the borrower or junior lienholders?
Correct Answer
A) $20,000
Step 1 — Calculate total amounts owed to the lender: Outstanding mortgage balance = $148,000; Court costs = $4,000; Attorney's fees = $3,000. Total lender claims = $148,000 + $4,000 + $3,000 = $155,000. Step 2 — Calculate surplus: Sheriff's sale proceeds = $175,000. Surplus = $175,000 − $155,000 = $20,000. The $20,000 surplus is distributed to the borrower or junior lienholders in order of priority.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
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