Legal Question in Real Estate Law in California

If your situation is such that your equity in the home doesn't cover the 1st, in other words the 2nd is entirely underwater, see a bankruptcy attorney about having the 2nd completely wiped-out in a Chapter 13 bankruptcy proceeding.

A lender can't foreclose unless and until you default on its loan. Defaulting on someone else's Loan Y doesn't ordinatily trigger a right for the lender on Loan X to begin a foreclosure proceeding. Sometimes, however, a loan will contain a "cross-default" provision in which a default on any other loan is deemed a default on the loan containing the provision. You'd have to look through your loan papers carefully, or have an attorney look for such a provision.