When my clients tell me that they have not paid the junior lien on their home (aka second mortgage, home equity line of credit, home equity loan) for years, they always become wide-eyed when I tell them that the junior lien can foreclose on their home.
A lot of times, the junior lien do not initiate the foreclosure process right away because there is a substantial amount owed to the senior lien (aka first mortgage). When a junior lien foreclose on the property, the senior lien remains on the property, so the junior liens must pay the senior lien just like you did or the senior lien will foreclose on the interest of the junior lien. The senior lien always has priority over the junior lien, which means that senior lien gets paid before the junior lien after a foreclosure.
In the meantime, the junior lien is a ticking bomb waiting to explode. For each mortgage payment you make means there is more equity in the house as you pay down the principal balance of the senior lien. The greater the equity is in your home the greater the likelihood that the junior lien will foreclose on your home because they are more likely to recover the balance you owed them.
Even if you are current on your first mortgage, the junior lien you are behind on can foreclose on your home when the time is right.
For more information, call experienced bankruptcy attorney Muoi Chea serving Sacramento, Stockton, Fairfield, CA and nearby cities like Modesto, Vacaville, Vallejo, Benicia, Tracy, Woodland, Yuba, Roseville, California.