[Aj J]

Suppose you own a home with a first and second mortgage. If you don't have the funds to continue making both payments which should you pay? For examples, suppose Mortgage #1 is with ABC Bank and is $1000/month and Mortgage #2 is with XYZ Bank and is $200/month. If you can only pay $800/month is it better to1) Pay the first mortgage $800 (thus you are behind on both mortgages now)or2) Pay the second mortgage the $200 and the first mortgage $600 (this way you are only behind on the first mortgage)More details: selling the home isn't an option because the home value is about half of what is owed. For the same reason, refinancing isn't an option either.