Good Afternoon!Foreclosed Home

I hope this newsletter finds you doing well. For today’s newsletter, I want to focus on the question of whether your second mortgage holder can foreclose on your home.

In our practice, we sometimes see situations where a homeowner may be current on his or her first mortgage but also has a second mortgage or a line of credit and the homeowner is in default on the second mortgage.

In a case like that, can the bank that holds the second mortgage foreclose on the property?

The answer is yes.

Most of second mortgage foreclosure cases we see are on properties with substantial equity. For example, let’s say you owe $80,000.00 on your first mortgage, $30,000.00 on your second mortgage, but your property is worth $500,000.00. This might be an attractive property for the second mortgage holder to foreclose on. Even though there is also a first mortgage on the property, the second mortgage holder is permitted under Florida law to sell the property to the highest bidder at a public auction.

If there is not a sufficiently high bid at the public auction, the second mortgage holder could take ownership of the property, pay off the first mortgage, and own quite a valuable asset that could later be sold for a handsome profit.

Let’s say an investor buys the property at the second mortgage foreclosure sale. Eventually, the first mortgage holder would file its own foreclosure, foreclosing out the folks who bought the property at the second mortgage foreclosure sale.

Florida foreclosure law can take some interesting turns, as you can see. I won’t get too deep into the weeds in this newsletter. The main point: in the case that you are in default on your second mortgage, never assume that they will not foreclose just because you have a first mortgage.

How best to resolve a second mortgage default depends on the facts of the case and it is always best to consult with competent legal counsel when developing your strategy for resolving a second mortgage (or line of credit) default situation.

I hope this information has been helpful! Have a great Sunday!


Until next time,


Ryan C. Torrens, Esq.

Consumer Advocate