A first mortgagee forecloses and the property sells for $100,000, net of expenses. The first debt is $80,000 and a second is $30,000. How much does the second mortgagee receive?
QUESTION
What is the effect of foreclosure of a senior mortgage on a junior mortgage?
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ANSWER
It extinguishes the junior mortgage if the junior lienor is joined. The junior lienor then has a claim to any surplus proceeds.