Hi Rock,

Great answers already provided to you. What I am seeing is the 2nd position Recourse or HELOC will sell your loans to a 'collection or insurance' company for 3 cents on the dollar. That collection agency will then go after you for the full amount. You can try to settle it directly with the lender, collection agency or insurance agency. You can also hire an attorney and have them settle it and pay for the settlement and the attorney fees. Good luck!

Short Answer: The 2nd gets nothing if the 1st lienholder gets the home back through foreclosure.

If this happens, and your 2nd was not a purchase money mortgage (i.e., if it was a HELOC), then the 2nd MAY have the right to pursue a Deficiency Judgement against you.... Good advice from Donald to see an attorney and discuss how likely this may be.

The other option would be a short sale. Visit http://www.foreclosureuturn.com . We discuss this in detail on the site. If you have any questions, feel free to call either Ed or myself. Good Luck!

Bob Hertzog
Designated Broker
Summit Home Consultants

You need to consult PROFESSIONAL LEGAL COUNSEL about this topic.
In general it is a "Grey Area" depending on what the 2nd lien holder money was used for (home improvement or a new Harley?).

If you need a reference for a short sale attorney you can contact me:
DONALD KEYS - REALTOR
Realty Executives
Donald@DonaldKeys.com

MUST SELL - BANK FORECLOSURES
FREE list with pictures
http://www.GlendaleAZForeclosures.com