Escrow & Title
A Wisconsin property subject to both a first and second mortgage. The first mortgage is being foreclosed. What happens to the second mortgage?
AThe second mortgage becomes the first mortgage automatically
BThe second mortgage may be extinguished if the foreclosure sale proceeds are insufficient to pay both✓ Correct
CThe second mortgage is always paid before the first
DThe second mortgage is transferred to the buyer
Explanation
In a first mortgage foreclosure, if the sale proceeds are insufficient to cover both liens, the second mortgage may be extinguished (wiped out), though the second lien holder may still pursue a deficiency judgment against the borrower personally.
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