Question 5

Ellie Eatery signs a $500000 mortgage, amortized over 20 years, 4 year term, 8% c.m. Just after the 24th payment the mortgage goes into default. The building which was held as collateral is repossessed and sold for $520000. Legal costs were $15000 and the realtor's commission was $30000. Six months after the last payment repossession proceedings are finalized.

a) Find the mortgage balance just after it goes into default.

b) Find the amount owing to the bank for the mortgage at the end of repossession proceedings.

c) Find the loss amount to the bank at the end of the proceeding.