How 2nd liens come into play

[Michael Rosenson]

A newbie question here but I'm having trouble finding this information clearly spelled out somewhere:  What exactly happens when a 2nd lien is established on a property?  Does the borrower now pay two separate mortgage payments each month--one to the 1st lien holder and one to the 2nd lien holder?  Does a 2nd lien holder need permission/approval from a 1st lien holder to take certain actions on the property (for example, things like a loan mod or a foreclosure)?  Anything else worth mentioning on the topic?

Thanks!

[Brett Goldsmith]

Liens go in recording priority. If there's two mortgage liens then they are paid separately. Either lien can initiate foreclosure if the loan goes into default and by following the proper foreclosure protocol.  A subordinate lien would put the other liens on notice of the foreclosure but they don't need permission to initiate it. They don't need permission from a senior lien holder for a loan modification but they may want a senior lien to be current prior to reviewing a loan modification. They would need permission for a short sale by all other lien holders. 

Hope this helps!