2nd lien bank foreclosure - excess funds go to 1st lien?
Scenario: 2nd lien bank foreclosure auction ~ $50k judgement/fee/interests. Winning Bid at auction $100k. 1st lien owed $150k (not in foreclosure yet)
My question: Does any winning bid over the 2nd lien credit bid automatically apply/pay toward the 1st lien creditor? Meaning, does that 1st lien lender (so not technically a subordinate lien) receive the additional $50k at the closing, essentially reducing their position to $50k?
Put another way, where does the $50k over the 2nd lien go?