Can a second mortgage be second in right in California?

The general rule in California real estate law is that first in time equals first in right. By definition, a second mortgage is second in time, and therefore second in right when it comes to foreclosure.

When does a second mortgage have the right to foreclosure?

Right to Foreclosure. The second lender can foreclose at any time after the borrower has defaulted on the second mortgage loan. The second mortgage lender does not need to wait for the first mortgage lender to foreclose.

How does foreclosure work in the state of California?

Foreclosure Law in California and Related Matters. If the borrower takes a loan for purposes other than the purchase of a property, and he later defaults on the loan, the lender must first foreclose upon the property to satisfy the debt, but can thereafter obtain a deficiency judgment for the balance of the loan.

Can a second mortgage extinguish a first mortgage lien?

Right to Foreclosure. Even though a second mortgage foreclosure will not extinguish the first mortgage lien, this does not prevent the second mortgage lender from exercising its right to foreclose. The second lender can foreclose at any time after the borrower has defaulted on the second mortgage loan.

Can a second foreclosure be filed in California?

California has a requirement known as the one-action rule. If a foreclosure is completed by non-judicial means, a second action to recover a deficiency judgment is not permitted. Using a judicial foreclosure, a lender may recover a deficiency judgment in certain circumstances.