Do Banks Often Issue Second Mortgages When They Fear a Homeowner Could be Underwater on a First Mortgage?

The NYT apparently thinks this is a common practice. An article discussing a Supreme Court ruling that a second mortgage could not be discharged in a chapter 7 bankruptcy filing even when the homeowner's first mortgage vastly exceeded the value of the house, told readers:

"a ruling in favor of the homeowners might have made banks and other lenders less willing to extend second mortgages in the future."

In a foreclosure, a first mortgage must be paid in full before a dollar can be paid on a se...