What happens if you default on a piggyback loan?

A piggyback loan is actually considered a second mortgage. Therefore, if you default on the piggyback mortgage, the lender can foreclose on your property. The piggyback mortgage lender has a right to the property if you do not make your payments. The money from the sale will first go to the primary mortgage holder, and the remaining money will go to pay off the piggyback mortgage. If anything is left over, you may get the rest. If the amount that was gained from foreclosure does not cover the loan balance, in most cases, you will not be responsible for the rest.