second lienholder forecloses against home co-owned by brothers

For answers to specific questions regarding legal matters, the brother should enlist the services of an attorney competent in real estate law in the state in which the property is located.

Depending on the legal documents that the brother signed ackowledging the second lien, the brother may have subordinated his interest in the property to the second lien. He may have given Bank B a superior interest in the property and then when the second lien was not paid Bank B paid off the first lien and extenguished the interest both brothers had in the property making Bank B the legal owner of the property. As the owner of the property Bank B is then free to sell the property to obtain as much money as possible to reimburse them for the funds they used to pay off the first lien and recoup as much of the defaulted second lien as possible.

Your question is how does this affect the brother that didn’t agree to pay Bank B’s second lien. Again the brother should consult competent counsel in the state the property is located in to get a specific answer to this question. You state that Bank B foreclosed on the brother’s interest so that certainly is one effect…he know longer owns the property in which he had an interest. Since he didn’t promise to pay the money back by signing the note or mortgage it may be that he cannot be sued or held responsible for any deficit if Bank B cannot sell the property for enough to make them whole.