Escrow & Title
A Mississippi property has a first mortgage lien of $120,000 and a second mortgage lien of $30,000. At foreclosure of the first mortgage, the property sells for $140,000. How is the $140,000 distributed?
A$70,000 to each lienholder
B$120,000 to the first lienholder, $20,000 to the second lienholder, and nothing for the remaining $10,000 deficiency✓ Correct
C$140,000 entirely to the second lienholder since the first already got their security
DEqually between both lienholders after costs
Explanation
Lien priority determines distribution: first in time, first in right. The first mortgage lien ($120,000) is paid in full first.
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