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6
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2
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Sean Stewart
2
Votes |
6
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2nd lien bank foreclosure - excess funds go to 1st lien?

Sean Stewart
Posted

Scenario: 2nd lien bank foreclosure auction ~ $50k judgement/fee/interests.  Winning Bid at auction $100k.  1st lien owed $150k (not in foreclosure yet)

My question: Does any winning bid over the 2nd lien credit bid automatically apply/pay toward the 1st lien creditor?  Meaning, does that 1st lien lender (so not technically a subordinate lien) receive the additional $50k at the closing, essentially reducing their position to $50k?

Put another way, where does the $50k over the 2nd lien go?

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