Robin's home is in a state that has a $30,000 homestead exemption.Robin defaults on a $60,000 debt that she owes to Suburban Mortgage Company.Robin's home is sold at auction for $80,000.From the proceeds,Suburban may recover

Question

Robin's home is in a state that has a $30,000 homestead exemption.Robin defaults on a $60,000 debt that she owes to Suburban Mortgage Company.Robin's home is sold at auction for $80,000.From the proceeds,Suburban may recover​

Quizplus · Accepted Answer

In a state with a $30,000 homestead exemption, Robin's home equity is $80,000 (sale price) - $30,000 (homestead exemption) = $50,000. Since Robin owes Suburban Mortgage Company $60,000, they are considered an unsecured creditor for the remaining $10,000 on the debt. Therefore, Suburban may recover a maximum of $50,000 from the sale proceeds. Choice C is the closest to this amount, as it represents the sale price minus the homestead exemption.

Robin's Home Is in a State That Has a $30,000