A building that is worth $5 Million has a first mortgage on it with $4 Million owed, a second mortgage with $2 Million owed, and a third mortgage with $1 Million owed. Which describes the distribution of the $5 Million proceeds from the foreclosure sale?
A) $5 Million to the first mortgage lender, and none to anyone else.
B) $4 Million to the first mortgage lender, $1 Million to the second mortgage lender, and none to the third.
C) $2,857,143 to the First mortgage lender, $1,428,571 to the second mortgage lender, and $714,286 to the third mortgage lender.
D) $1,666,667 to each lender.
Correct Answer:
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