Ruth Simon has a huge piece in today's WSJ on second liens: home equity loans and lines of credit which are junior to primary mortgages. These things can cause a lot of trouble for homeowners:

"The people in the first position will say, 'Until you get a deal with the second, why should I make a deal with you?'" says Iowa's Mr. Thompson. Second-mortgage holders are often reluctant to approve a short sale or deed in lieu of foreclosure that could wipe out their claims, he adds.

At the same time, the second-mortgage holders often reject offers of as much as $2,000 for loans they've already written off, just because the costs involved in evaluating the offer and releasing the borrower from the lien. So while a second lien might be worthless to the person who owns it, it can make life very difficult indeed for everybody else.