Even “good” second mortgages carry a lot of risk.
The reason for this is that most failures to keep up payments on second mortgages happen when the economy is in recession and people are losing their jobs.
That in turn affects the value of the original collateral.
The foreclosure would then be done by the first mortgage holder.
The second mortgage holder will be fortunate to get scraps at that point.
“My job is a corporate recruiter so I pretty much live the employment experience every day. When I read about the ‘job numbers’ I am incensed. Anyone that spends 10 minutes on LinkedIn and reads the feed can see the absolute desperation of white collar workers. Daily and numerous posts of people who are literally at the end…about to go bankrupt, about to lose their home and marriages. People who have been out of a job a year+, unemployment run out and savings gone…people who 2 years ago would have had many job offers, people who are in the professional class and find themselves completely despondent.”
via:
https://theconservativetreehouse.com/