Suppose that the first mortgage on a property has a balance of unpaid principal, interest and legal costs of $200,000. The first mortgage bank has foreclosed, and the sale is tomorrow. The bank has obtained an appraisal and believes the house could be sold for $260,000 in 3 months. Realtor commissions would be $10,000 and upkeep costs for 3 months would total $5,000. There is a second mortgage of $40,000. what Most first-mortgage banks will bid in this situation ?

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In a foreclosure situation the first mortgage bank will typically bid up to the amount of the outsta... View the full answer