How do foreclosures work in Georgia for homes with a 1st and 2nd lien?

A loan taken out to purchase a piece of property is secured by that property.  This is true whether regardless of the number of loans involved.  Each bank that issued its respective loan essentially has the right to foreclose on the property if the debtor fails to make his or her loan payments.  So even if only one loan goes into default, the institution that issued this loan has the right to begin foreclosure proceedings on the property that was used to secure the loan.  Additionally, if the value of the house is not enough to pay the debt owed, the debtor will be liable for the difference. Thus, if you took a loan of $200,000 to purchase a house valued at $200,000, but then the house was sold at a foreclosure auction for $180,000, you would still owe $20,000 to the bank that loaned you the money.

In such a situation it is important to contact an attorney that deals with these matters.  Most loans provide a grace period before the loan goes into default.  However, this time period is often relatively short, so it is best to contact an attorney sooner rather than later to discuss your options.