The second mortgage is threatening foreclosure... how can they do that?

Louisiana foreclosure

This is an actual comment for a client:

”Our first mortgage with Litton is current; our second mortgage with Bank of Montgomery, Natchitoches, Louisiana is five months past due, although a payment was made in January. We have not been served, but the account has been turned over to the bank's attorney, who intends to foreclose. PLEASE HELP. Thank you. ”

The only way a second mortgage can Foreclose is for them to buy the first mortgage company out. One way to stop this is to show the second mortgage company that they're just isn't enough equity in the property. If this can be proven that with the first and second mortgage paid off there is a deficiency then there is a good chance they will not foreclose. If this happens they will usually just write the loan off as a bad debt and move on. There will still be a lien on the property and if you ever try to sell it you will have to settle with them at that point.

The key to this once again to show them that there's not enough equity in the property. You can do this by getting an appraisal.