Under MI state foreclosure and real estate law will foreclosure sale go to pay off both first and second mortgage

There are often state laws that can impact this issue. However, generally if the first mortgage forecloses, unless the bidding at the sale goes higher than the first mortgage debt, the holder of the second gets nothing. If that happens, in most states, the holder of the second has the right to attempt to get a deficiency judgment against you. However, deficiency judgment actions are normally dischargeable in bankruptcy.

You need a consumer law attorney who is knowledgable in foreclosure and bankruptcy. The National Association of Consumer Advocates (NACA) is a non-profit consumer advocacy organization. NACA maintains a web site at www.naca.net where it lists geographically consumer law attorneys all over the US. If you don't already have an attorney, please look there for someone in your area who can help you.