John and Mary Rose Tessler have had their home taken in foreclosure. They owe $92,000 on their original mortgage and $8,000 on their second mortgage. A contractor they hired to add on a screened porch is owed $2,000, and the contractor has filed a lien. The lender has spent $4,000 in bringing the foreclosure suit. The sale at foreclosure brings $99,000. How much would the contractor receive?

Question

Quizplus · Accepted Answer

The contractor would receive $0 because the proceeds from the foreclosure sale would first go towards paying off the first mortgage ($92,000), then the second mortgage ($8,000), and the foreclosure suit costs ($4,000), totaling $104,000, which exceeds the sale amount of $99,000, leaving nothing for the contractor.

John and Mary Rose Tessler Have Had Their Home Taken