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What happens to the second mortgage after a foreclosure

Real Estate Agent with DeCoursey Real Estate Group

I have a past client that had a 1st and a second mortgage on a home that we tried to get a short sale approved.  By the time we had an offer, the bank took so long that the house was lost to foreclosure.

The home is now listed and has a pending offer for $75,000 less than what our offer was for before it was foreclosed.  This makes me so angry....I really don't think banks give a damm about anything or anyone, they just like to talk a good story so they can get bailed out at a later date.

Anyhow, now my past client is getting collection calls for the second mortgage demanding that she settle or start paying back the second mortgage on a property that she has already lost.  By the way, both the first and the second loans were with the same bank, so they both had an opportunity to accept the original offer.

Have you had something similar?  Why are they calling her on the second?  This is all very confusing for the former or current homeowner.

Rosie Finney

@connections game: In this scenario, since both the first and second mortgages were with the same bank, they may have different departments handling each loan. The bank may be pursuing collection on the second mortgage because it remains unpaid even after the foreclosure of the property.


It's not uncommon for banks to pursue borrowers for repayment of outstanding debts even after a foreclosure. However, the specifics of each case can vary based on the loan agreements and local laws.


If your client is unsure about the collection calls or needs assistance, it may be helpful for them to consult with a legal professional or a financial advisor who can provide guidance on how to handle the situation.

Mar 07, 2024 08:19 PM