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Yes, a second lien holder has the right to foreclose just as the first does. This seldom happens because the 2nd lien holder would have to totally satisfy/pay off the first lien holder before it is allowed to keep anything. Because there is usually not much, if any, equity in property, it is generally not worth while for the 2nd lender to foreclose. However, that's not to say that this never happens - it does.
You would likely need to file the action in district court. An individual person can represent himself/herself in court without an attorney. However, if you're suing on behalf of the business, you will have to get an attorney because a non-attorney cannot represent another person or legal entity.
It is perfectly legal to send a demand letter in good faith before filing suit.
It does not make a difference in terms of their rights. However, because the same lender holds both notes, it makes it much more likely that the 2nd lien holder will foreclose because any money recovered will be turned over to it.
Yes, so long as the business is not involved, and only you personally, you can represent yourself.