question about 2nd mortgage
Question: If I hold a 2nd mortgage and bank has first mortgage, and if the borrower fails to my 2nd mortgage but may still pays first mortgage, what recourse can I do?? Thanks in advance.
Answer: You foreclose the mortgage. Once you have a judgment, the clerk of the court will schedule the property to be sold to pay the judgment. Keep in mind that it will be sold subject to the first mortgage. In other words, whoever is the successful bidder will still be responsible to pay the first mortgage. However, if the first mortgage is for $100K and the second is for $25K, and it sells on the courthouse steps for $15K, you just took a $10K beating. Hopefully the property is worth in excess of the two mortgages. the house is sold with the first mortgage for $15K. In other words the buyer is paying $115K for the house, $100K payable to the owner of the first mortgage (payable in monthly payments as it was before the transaction) and $15K to the owner of the second mortgage.
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