Legal Question in Real Estate Law in Illinois

Unfortunately for you, yes they can.

Yes.

Yes

This is because when you signed a mortgage you borrowed money and used your house as security. In the case of a second mortgage you pledged the equity in your house as security.

The holders of the second mortgage will have a'discussion' with the holders of the second, but that is the end of it. Until you are current on both mortgages, the dispute is between the two mortgage holders as to who gets what and how much.

The short answer is "yes". I suspect that you would be a candidate for a Chapter 13 bankruptcy based on the fact that my office does a lot of bankruptcy work, and this is a fairly typical situation.

Absolutely. The second mortgage company will foreclose your interest in the property, essentially stepping into your shoes. They will still be responsible for the first mortgage, which, if there is sufficient equity, they will pay off, and then sell the house.