Shortfall in paying a second charge

[fletcher73]

My partner has 3 second charges on his property and wants to sell his house shortly to release any equity to pay off as much of his debt as possible. However, there will be a shortfall. What happens to these secured loans that aren't paid by the sale of the house? Do they just become unsecured and once it isn't a second charge are you able to potentially renegotiate tha loan amounts/interest with the finance companies?

[Nether Edge]

Mortgagees (lenders) will refuse to seal "release of mortgage" forms unless they are paid (or otherwise satisfied) so he cannot simply sell and leave them unsecured; no-one could safely buy from him.
He would have to offer alternative security (life policies? shares? another landholding?) or find unsecured lending or else strike a deal with them. Failing that, the first mortgagee could repossess if borrower is in arrears, in which case funds surplus passes down from first mortgagee to mortgagee 2 etc. until it's gone.