Real Estate Law
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Yes, the second lender can foreclose on the property just as the first lender can. The only real difference in the two is that the second lender would have to turn over all proceeds from the sale to pay off the first mortgage before it can retain any money. This is why most second lenders never foreclose - - because the property is not worth enough to have any money left over after the first lien holder is paid. However, the second lender certainly has the right to foreclose if the loan is in default.