Question

Morey purchased a house for $150,000, paying $15,000 in cash and giving a mortgage to BigBank for the balance. When Morey defaulted on the loan, BigBank foreclosed and sold the house for $25,000 less than Morey owed. Morey believed he no longer owed BigBank any money. Discuss the case.

Answer 1

Morey is liable to pay the balance mortgage money to BigBank.,

Explanation:

Mortgage value = $150,000 - $15,000 ( advance paid by Morey)

                           = $135,000

Defaulted on the loan, BigBank foreclosed and sold the house for $25,000 less than Morey owed. so the amount received by the bank

$150,000-125,000=125,000$ (sales value of the house)

Balance on loan outstanding = $135,000 - $125,000 = $10,000

                                              = $135,000-125,000=10,000$

So, Morey is liable to pay $10,000 for the balance mortgage money to BigBank.