What if a second mortgage or second deed of trust lender forecloses?
If the second forecloses, they end up in one of two scenarios: Their “credit bid” lets them get the property back. Now they own the property but it still has the first mortgage or first deed of trust on it. Or: Someone outbids them and someone else ends up with the property as the new owner. Subject to the first mortgage which is still on it. If the second lender wants to foreclose, they have to keep the first lender from foreclosing. The second lender, either the second mortgage holder or the second deed of trust holder, must make your payments for you to the first mortgage or first deed of trust holder. These payments are made for you and added to how much you owe, along with higher interest and charges for this “advance to the first” that they’ve made for you. But let’s see why that doesn’t happen much these days. And why you may end up holding the bag for a big judgment for a second mortgage. If the second lender is owed $50,000, and the first lender is owed $300,000, and the prope
