If the amount realized at foreclosure sale is more than the indebtedness, the excess belongs to?

If the amount realized at foreclosure sale is more than the indebtedness, the excess belongs to?

• A. The lender
• B. The mortgagor
• C. The trustee
• D. The government

Answer: (B)

At foreclosure, sale proceeds are used first to cover costs and to satisfy the debt secured by the mortgage. If the sale brings in more than what is owed, the remaining amount is the owner’s equity in the property, so it belongs to the mortgagor. The lender has already been paid in full from the proceeds, and any surplus goes back to the borrower, subject to any other liens that might take priority over the excess. In the typical case without other liens, the excess goes to the mortgagor.

At foreclosure, sale proceeds are used first to cover costs and to satisfy the debt secured by the mortgage. If the sale brings in more than what is owed, the remaining amount is the owner’s equity in the property, so it belongs to the mortgagor. The lender has already been paid in full from the proceeds, and any surplus goes back to the borrower, subject to any other liens that might take priority over the excess. In the typical case without other liens, the excess goes to the mortgagor.