Legal Question in Real Estate Law in California

Re: 2nd Mortgage Foreclosure

Probably 30-40 pages of fine print in the codes, plus hundreds of reported cases interpreting and applying the statutes. The question is not quite so broad as asking "What is the California law on driving and traffic?" but it is in the same ballpark.

One frequently asked question is what becomes of second loans if the holder of a defaulted first mortgage forecloses. The answer is that the holder of the 2nd generally loses its collateral and becomes an unsecured lender, often called a "sold-out junior." It can sue to enforce its loan, and although it has nothing to foreclose on and no collateral, once it has a judgment, it can try to enforce its judgment against the defaulting borrower's other assets, or by garnishment of wages, etc.