Question Re: Foreclosure And Second Mortgage
if a property is foreclsed on, and there is both a first and second mortgage, what happens?
if a property is foreclsed on, and there is both a first and second mortgage, what happens?
If the 2nd mortgage forecloses, you buy the property subject to the 1st mortgage and any liens or judgments superior to the 2nd.
If the 1st mortgage forecloses, you buy the property free of all encumbrances.... if it was a proper foreclosure action with a good title search and all claimants are mentioned and served as defendents.
[addsig]
where are you located...
More than likely there is probably a deficiency judgement provision in the security instrument.
That means if the second lender feels that it is worth coming after you then they may come after you for the difference between what they are owed+cost and what they get at the auction.