Legal Question in Real Estate Law in California

Yes, but he is unlikely to get a buyer, since that transfer will be an event of default on the first.

Yes, but as Mr. McCormick states, that will most likely trigger the "due on sale" clause in the senior deed of trust. That causes the entire unpaid balance to become immediately due and payable.

I agree with both previous answers that 99% of the time, or more, the foreclosure by the second will be an event of default on the first, but I have encountered at least one situation where the first and second were both "homebrew" loans, privately arranged and with nonstandard (unprofessional, I'd say) documentation where this did not result in a default on the first. Also, I have run into at least two situations where the holder of the first wasn't at all unhappy to see the property foreclosed by the holder of the second, and all the parties worked together to preserve the first. In one case the buyer and the first lender were quite happy with one another; in another the foreclosing lender on the second wanted the property so badly he took over the first and refinanced it before the lender on the first figured out what was happening. However, as the other lawyers say, more often than not the first lender will be very uncomfortable and will exercise its rights under the due on sale clause.