How does a 2nd Mortgage foreclosure work?
If the first Mortgage has already been foreclosed upon and the bank took ownership, what happens when the 2nd mortgage is being foreclosed. If you go to the sale and are successful, what have you purchased rights to? Are you then responsible for the first mortgage?
Thanks
If the 2nd leinholder forecloses on a property, then you will have to inherit the 1st leinholder. If no one bids on the home, then the 2nd leinholder must payoff the 1st leinholder in full before getting any proceeds from the sale, if any. It is a risk the 2nd takes. But, if you were to acquire the property when the second forecloses, then you will have to payoff the 1st leinholder.
Make sure you find out exactly how it works through a real estate attorney or from your county courthouse that is holding the auction. Each county does things differently.
Tanya