Forclosure, Equity & Notes

[Joshua Andrews]

From a note owners perspective, I'm a little confused regarding what happens to excess equity when the note owner is forced to foreclose.

Lets say for example, I own a 2nd mortgage. For simplicity lets assume there is 30k excess equity after the 1st and 2nd lien are paid in full. Debtor defaults and I am forced to foreclose. Who receives this extra 30k equity?

My second question: Does this answer change if there is only a 1st mortgage and note holder is forced to foreclose and take over the property? To me it would seem they are now the new owner, and can sell the property for anything they like.

Can someone more seasoned than myself explain this in laymen terms?

Thank you!

- Josh