Question:

What happens if a second mortgage loan default occurs?

Answer:

You might have taken a second mortgage loan to consolidate debt and default has occurred. If that happens to you, you should know that a home equity loan as the second mortgage loan, if managed improperly, may lead to foreclosure on your home.

A second mortgage loan default will be as dangerous as a first mortgage loan default. Both can make you lose your home. Even if your first mortgage is all fine this does not mean that the second lien holder cannot initiate foreclosure on your home. They may even buy your first mortgage.

The best thing to do is to contact your second lender if you default on your second mortgage loan and try to work out a plan to put you back on the track. Since a foreclosure costs money to the lender, they may very well be happy to help you stay in ownership rather than foreclose.

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Why: Refinance to a fixed rate loan while mortgage rates are still low.
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Common misspellings: mortage and morgage