Arrears on secured loan - repossession of property

louis548

I've just discovered that my sisters house is likely to be repossessed due to arrears on a secured loan.
There is a hearing next week.
She is ill and has ignored all letters:(
She has a secured loan plus a mortgage with another company.
If the loan company repossess what happens to the mortgage?
I don't have a clue when it come to debt and apologise for my ignorance.

magpiecottage

It is ironic that elsewhere people are reporting that they are cancelling precisely the type of insurance that would have protected your sister.

If the lender secures possession of the property they must secure it, maintain it, insure it and market it to get the best reasonable price.

They must then clear the first lender's loan and their own expenses.

Then they clear their own loan.

If there is not sufficient the borrower remains liable for the shortfall but any surplus is returned to them.

louis548

Thank you that makes sense.
Its such a shame she has no insurance.