This is a common question. The answer is that a second lien holder’s security interest in your home is lost if the first lien holder forecloses. However, the debt is not wiped out, the obligation to pay still survives. If the second lien was a non-recourse note, then the second lien holder may not go after the borrower. (In Texas, home equity loans are non-recourse, so the lender may only look to the property for relief.)
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