Foreclosure on Investment Property

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A friend of mine has 2 rental investments and a primary residence. With the real estate crash, he is now underwater with one rental property. He has a tenant, but the rent collected is only two-third of the total monthly mortgage payment. Rent on the other property is enough to break even each month.

Prior to his recent job loss, he used a portion of his salary to make up the difference on the rental shortage, but apparently he can no longer do this and will default (the property has two mortgages - first and second). The market value of the property is a lot less than what he owes. He talked to the first mortgage but they said there was no help available for investment properties.

Oregon is a non-recourse state but does this apply to investment properties as well? If it does, does it also apply to second mortgages? If he defaults both loans, and the banks decide to foreclose, could they seize any assets that he has by putting liens on his other two properties (although not much but he has some equity in his primary residence and the other rental)?

Thank you.
Your buddy desperately needs to speak with a bankruptcy lawyer, ASAP. This forum will be of no value to him. His financial demise is imminent. He desperately needs to consider bankruptcy. That is his only way to save something.
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