2nd mortgage and judicial foreclosure question.

[sidhesadie]

Ok, this is mildly complicated and no one may have any idea, but I thought I'd see if anyone does.

Divorced 3 years ago.
House had a first mortgage in both our names. I got house in divorce. I had 2 yrs to refinance in my sole name. However, I have been unable to qualify to do so.
I took out a 2nd in my sole name 2 years ago. House is titled in my sole name.
Can't afford to keep house.
Tried to do a short sale or mod, can't qualify because ex hub is still on first, his income exceeds 200K a year (mine is under 10k)
I do not get alimony.

His income renders me ineligible for any short sale or mod bc there is no hardship.
So, the house will be foreclosed. (I offered to sign it back to ex so he could rent it out, he declined. He is aware a foreclosure will go on his credit as well but he has just bought a new house and so doesn't care).
We live in a state that is no recourse unless they do a judicial foreclosure. They would never bother to do so with ME, but he has income and assets, so they will. (the first)

My question is, when the first files the judicial foreclosure to go after him for the deficiency, what happens with the second that's in my sole name? Does the first have to pay the second to foreclose? Will the second be stripped off the house and become a personal loan due? It's a second mortgage secured by a deed of trust, not a HELOC.

[iv65536]

Because the foreclosure laws vary from state to state, we need to know which state the property is in.

From what I am reading, this is a situation where the home is worth less than the first, and in a state where both judicial and non-judicial foreclosure is allowed.

[sidhesadie]

Yes, I'm sorry, the property is in Oregon, which allows either method of foreclosure.

The home is worth about what the first is, but after fees and closing costs, it would end up in a short sale. The 2nd is SOL.