How to Foreclose on a Second Mortgage

Video Transcript

"This is financial adviser, Patrick Munro, talking how to foreclose on a second mortgage. A second mortgage is just that. It's a secondary situation on the title. There's the first position, which is normally held by the primary mortgage company. But if an individual needs a second mortgage in order to facilitate the purchase of a property, the second mortgage company steps forward and makes sure that those dollars are available. They also take a position on the title as second position. If the mortgage person who has the home does not make the mortgage payment, the second mortgagee can step up and initiate a foreclosure action after a period of missed payments. This supersedes the first mortgage company's interests and in fact, will allow, if it goes through the court system, the second mortgage company to maintain title of the home. However, they are still responsible if they're successful in paying the first mortgage position out. It's a very difficult situation for a second mortgage company to be in. But that's why it carries a higher interest rate than the first mortgage. This is Patrick Munro, financial adviser, talking about how to do a foreclosure in a second mortgage."