Home Foreclosures: 12.1.4 The Borrower’s Rights in the Property After Foreclosure of a Junior Mortgage
At common law, foreclosure of a junior mortgage has a severe impact on all the borrower’s rights in the property. According to common law, upon foreclosure of a junior mortgage, the borrower loses all rights in the property.18 The purchaser at the junior mortgage foreclosure sale can proceed to evict the borrower and take possession of the property. If there is substantial equity in the property, the purchaser is incentivized to pay off the first mortgage and acquire unencumbered title to a valuable asset.