A property with first, second, and third mortgages of $150,000, $25,000, and $10,000 respectively is sold for $170,000. How much does the second mortgage holder get?

To determine how much the second mortgage holder receives from the sale of the property, it's important to allocate the sale proceeds based on the hierarchy of the mortgages.

The total amount owed in mortgages on the property is the sum of the first, second, and third mortgages:

• First mortgage: $150,000

• Second mortgage: $25,000

• Third mortgage: $10,000

The total mortgage debt is $150,000 + $25,000 + $10,000 = $185,000.

When the property is sold for $170,000, this amount is insufficient to cover the total mortgage debt. Therefore, the proceeds will be distributed starting with the first mortgage holder.

1. The first mortgage holder will receive the entirety of their mortgage amount first, which is $150,000. After this payout, there will still be $20,000 remaining from the sale price ($170,000 - $150,000 = $20,000).

2. Next, the remaining amount of $20,000 will be allocated to the second mortgage holder. Since they are next in line in terms of priority, they will receive as much as they are owed, which is $25,000. However, since only $