[BarbDow]

Can a junior note holder, in this case a second put a lien on another real property owned by the same party?

The property is in California and will be going into foreclosure.

The second is not a purchase money second. It was taken out after. The second is calling and saying they are going to put a lien on another property owned.

[pacific nw]

At the time the loan is made, documents are drawn up to state which property the lien will be placed against. In some instances, a lender will "cross collateralize" meaning place the lien against two or more properties. The lien gets paid when one of the properties is sold or refinanced, (It is unusual to do this and you should avoid any lender who requires it.) However, if someone or a bank places a lien against a property not stated in the Deed of Trust or Mortgage, then they are "clouding" the Title and can be sued for damages.

[Dr D]

The junior lien holder will be able to sue you on the basis of the note that was executed. Once they secure a judgment against you, it will affect any real property that you own.

[pacific nw]

It's a several step process. They can not just place a lien against another property because they feel like it. They have to sue and win. Then there would be a judgment. But all of his presupposes the following:

When a property goes into foreclosure, there is a period that the owner can pay the arrears and take the property out of foreclosure, as long as it is before the sale date. Just because a Notice of Foreclosure has been established doesn't mean the property HAS to go to sale. Banks don't want to own property. The property owner can bring the loan current, set up a repayment program with the lender (forbearance agreement) file a bankruptcy to stop the sale, sell the house or possibly, though less likely in this financial climate refinance out of foreclosure. If the first lender has the house in foreclosure and the sale date is held, if the bid amount offered exceeds the amount owing on the first loan, the remainder goes to the second and so on. If there is anything left over it goes to the owner. (In my state anyway, on the west coast.) This varies from state to state. In some states a lender can not sue for deficiency if the first takes it to foreclosure and they are in second position. Check with a local Real Estate Attorney or the company doing the foreclosure. They will not bite. They don't like you, they don't dislike you... they are simply paid to do the foreclosure and couldn't care less and will tell you what your local laws are. (Though they won't give legal advice.) Give them a call and ask. Call your lender and see if you can set a forbearance agreement. Most lenders WANT to do them.