Question: Can they foreclose on your home if you are in default on your home equity loan but current on your primary mortgage?

Answer: If you are current on your first mortgage and become delinquent on your home equity loan (which is a form of second mortgage), the second mortgage lender has the legal right to foreclose on your house and property. However, it may not do so because of economic reasons, which I will discuss below.

Here is the good news: Lenders do not like to foreclose on mortgages because foreclosure offers a poor economic return. Lenders foreclose only as a way of limiting losses on a defaulted loan.
Generally speaking, when homeowners get behind on mortgage payments, lenders will work with them to bring the loan current. To do so, however, the owner must stay in communication with the lender and be honest about the financial situation.

Related posts:

1. Low Mortgage Lenders : Hope In the Foreclosure Plan?

2. Mortgage After A Foreclosure

3. Executing a deed in leu of foreclosure

4. What lenders will look for when taking a second mortgage