If 1st mortgage is forclosed on and 2nd mortgage doesn't get any money can they sue for the balance?

Yes. The mortgage exists as collateral for the second mortgage loan. If the second mortgage loan is not satisfied at the foreclosure sale, the second mortgage lender merely loses the collateral but not the loan and it can sue the now former homeowner for the unpaid balance.

This is no different than if there is insufficient money from the sale to pay the first mortgage holder in full. The first mortgage hold can file a lawsuit later to recover the deficiency between the actual loan amount and all credits the homeowner is entitled to receive.

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