NPN-2nd position, first in foreclosure

[Mark Gibbs]

I'll get this right out of the way up front, note newbie (i.e. 1 note). 

I am looking at a second that has an unpaid balance of approximately 30K. The first is foreclosing on the borrower, the court date is set and the unpaid balance of the loan is $170K, I cannot identify if attorney fees are included in this amount. Approximate valuation of the home is $290K so there is some equity. This appears to be the second time the borrower has been in foreclosure, it appears this time they are planning on letting the house go since they did not respond to the lenders notice of foreclosure.

The question I have on this is the lender on the first sent out notice to borrowers of pending foreclosure, nothing was sent to the recorded debt holder in second position. Is that required?

Second question, at this point how would the debt holder in second position protect their position? If say, the note holder in first position sets an asking price of $170K to remedy the unpaid balance the second would be wiped out. But if the second attempts to enforce rights under the loan, wouldn't this potentially protect some of the debt position or is the secondary debt just too late to the party? Foreclosure sale is scheduled for 1 month from now.

No federal or county liens appear to be present on the property. 

Before I get a bunch of responses indicating, don't bother with this, it is over your head. That isn't my concern. Nothing ventured, nothing gained. Thanks for any insight you can offer. 

[Steve Hodgdon]

Timing issues aside, contract issues aside, couldn't you pay the arrears, taxes, etc on the 1st. Then foreclose, if your contract/docs are all good, on your second, if there's a clause that covers borrowers necessity to keep 1st in good standing?