Sally, who is 66 years old, owns a house that has a fair market value of $300,000. Sally still owes $100,000 on a deed of trust against the house. Sally has failed to file a declaration of homestead. Bob obtains a judgment lien against Sally in the amount of $250,000. The most that Sally can receive from a foreclosure sale of her house is...
$175,000. Sally is 66 years old, so her automatic homestead exemption is $175,000, while the equity in the home is $200,000. Therefore, Bob can foreclose on the house, but the order of payment is $100,000 to the lender, and the next monies to Sally for her homestead exemption.