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SRC a lot depends on what state you are in on how the 2nd will be handled or the 1st for the matter. If you are in California or Arizonia and the 2nd was "purchase money" you should be ok. If the second was taken out after close of escrow it will be a recourse loan and they will most probably come after you at a later date. The 2nd has the right to foreclose but if you are underwater there really is no chance of that. A good website is loansafe.org. There are people on the site who can answer most any questions for your problems but in the end it is usually worth it to go find a decent attorney.
Now I don't know what state you are in but I would not worry too much about people "only" being about to afford a home in the low 200s. Really you might get people who are actually better with their money than the ones you have now. For a 460k house someone should have a minimum of about 150-175k household income for less than 20% down loans. In most places that would be considered somewhat high income. I would bet very few of your current neighbors actually did that. One of the good things about the current situation is people actually have to be able to afford the houses they are buying. I would be much more worried if the investors come in and they start turning them all into rentals. I know on my block there are 2 houses for sale and two (including one I just bought) just sold out of 10 houses.
Wow what a load of crap. Mr Orshoff is nothing more than a spamming leach that comes out to prey on people using scare tactics and outright lies. He is a prime example why you need a good lawyer and advice from someone who has no interest in your decision. First off in reading CA Civil Code 890 you will see the definition of rent skimming to be not using rent "DURNING THE FIRST YEAR AFTER ACQUIRING THE PROPERTY", to pay the mortgage. I would also be interested if he can show one example where a homeowner, who later turned his house into a rental, was prosecuted for rent skimming. I read many websites and have never heard of anyone even being treatened with prosecution. The vast majority of people in this situation have held there property longer than that anyway.
Also another scare tactic and outright lie is he states "you will be sued" for any loss suffered by the bank. All non-purchase money mortgages in California are non-recourse. If you buy a home, as a primary residence with purchase money, and do not refinance, even if you later turn it into a rental, it will still be non-recourse. Now California is a one action state and the lender only has one shot at you. They can either sue you (judicial foreclosure) or just take the house (non-judicial). They almost always just take the house even if you have a non-purchase money loan. If they do non-judicial they can not later sue you for more money. Now there are lots of things you should talk to a qualified attorney about but don't believe the scare tactics of Mr. Orchoff. He is only here to spam the board and to try and scare you into giving him money for worthless advice. Get educated and you will see it usually is not as bad as it seems. It is stressful enough without having to deal with the scam artists and leaches.
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