A homeowner has a first trust deed balance of $300,000 and a second trust deed of $50,000. The property is foreclosed and sells for $320,000. How much does the second trust deed holder receive?

Explanation

The first trust deed is paid first: $320,000 − $300,000 = $20,000 remaining. The second trust deed holder receives only $20,000, suffering a $30,000 shortfall. Junior lienholders are paid only after all senior liens are satisfied.