Arrears on Second Mortgage

[Nearly Here]

A question in these times of falling house prices:

If you have a second charge on a property, and the company that provides it is granted a repossion order, when the house is sold, is the first charge paid off in full, and any remaining goes against the second charge?

Could the company that provided the first mortgage argue against a repo order if the house was in negative equity, but the customer was upto date with that mortgage?

Thankfully, I'm not in that position (yet / quite) but would be interested in your thoughts.

Thanks All

[Goldlady]

Interesting question. I think you are right about the first mortgage being settled before the second charge, however I am not sure how the first mortgage company would react if the second one repossessed and you weren't in arrears with them. I would suspect they would not come to your aid, but I have no real knowledge. We had a second mortgage company issue repossession proceedings and indeed I have defended a similar case for a friend and I don't think the first mortgage company was even notified in either situation..