You posted:
From what I've learned from my loan officer is that in order for the second position to trully foreclose on the first, they would have to come up with enough money to clear out the first's position. Not likely to happen here. Too much money to come up with. So you might ask, why are they proceeding? Because they have to in order to protect their position from being wiped out by first. If the first position lien holder filed a notice of default, the second position would be totally wiped out.
AFAIK, this is not totally correct. A junior lienor whose loan is in default may foreclose on the collateralized property just as the senior lender may. The only difference is that the property, once sold at foreclosure, will still be subject to the senior lien (whereas if the senior lienor foreclosed, the junior lien would be wiped out by the foreclosure proceeding). Thus, any mortgagor, like CPRK in this instance, is in danger of losing its property if it goes into default on ANY of its mortgages.
That being said, I'm still confident that the matter will be resolved before foreclosure for the reasons some have articulated - CPRK simply has too much to lose by forfeiting the land, especially if it is current on the first (and presumably much larger) lien.
AI
