How will the money paid at foreclosure be distributed

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Reference no: EM132031959

Little Timmy buys a $500,000 house with a $400,000 mortgage from Megabank, NA. A couple of years later, Little Timmy borrows $50,000 from Big Brad home finance, Ltd, and gives Big Brad Home finance a second mortgage on the house. Time passes. Little Timmy defaults on the first mortgage and Megabank forecloses. The house has a market value of 595,000 at the time of the foreclosure sale. Megabank is due $375,000 on its loan, including attorney's fees and costs of the sale. Big Brad home finance is due $45,000 on its loan. Larry Lassie is the highest bidder at the foreclosure sale, paying $410,000 Answer the following (a) does Larry Lassie take the property with or without any of the mortgages still on the house; (b) how will the money paid at foreclosure be distributed; and (c) does Little Timmy still owe MegaBank or Big Brad Home finance and if so, for how much?

Reference no: EM132031959

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