2nd Mortgage Foreclosed Before 1st Foreclosed - Who's In First?

[Scot Burns]

I'm in CA and here's the scenario. A property is worth $600K. There is a $50K first mortgage and a $450K second mortgage. Both loans have been defaulted on and there are two auctions dates set. The First mortgage has the first date, however, the second mortgage lender filed NoD 9 months prior to the First lender. What happens?

Can I safely try to buy the house at the first auction for the First mortgage, or does the fact that the Second lender got defaulted on first cause problems? 

[Wayne Brooks]

Yep, the first mtg will Always be in first position....it doesn't matter who files a NOD first, who gets to the actual sale first or who blows their nose first....the first is the first.

But something to check....with that small of an initial mtg, and that large of a second....the second mtg May have gotten a subordination from the original mortgagee, now making the second mtg in first position.  It is rare, but I’ve seen it on two foreclosures.  Read all the documents recorded in relation to the second mtg, they are typically recorded together, as one document.