What happens to the second mortgage when the first mortgage forecloses?
I am going through a foreclosure on my first mortgage, what are my options with dealing with the second mortgage? Any legitimate websites with guides for dealing with the aftermath of foreclosure would also be appreciated. A: If and when the bank sells your house, the amount of the sale will be applied as follows: First, the costs of repossession, foreclosure and the sale will be paid. Second, money will be applied to your outstanding balance Third, any other lienholders (2nd mortgage) will get money. In this market, the bank is going to be lucky to sell the house for enough money to pay the fees let alone the first mortgage. So, what will happen is that the 2nd mortgage holder will want you to pay and they very well could sue you and garnish your wages to get paid. Good luck.
