Legal Question in Real Estate Law in California

You need to understand that there is a pecking order among lienholders, based upon the date the lien was recorded. As a general matter, liens recorded earlier than the lien being foreclosed are unaffected by the foreclosure, and you purchase "subject to" those liens. Liens for property taxes may also be entitled to priority. Junior liens, such as a 2nd DofT recorded after the DofT being foreclosed (if that be the case) will be wiped out by the foreclosure.

I recommend that before bidding on a property in a foreclosure auction you obtain a title report and see what liens are prior, and what are junior, to the interest you'll be bidding on. Also, there may be instances where an HOA is entitled to a special priority, notwithstanding date of recording.

Finally, technically you aren't buying from the 1st lender - you are buying from the trustee. The lender will probably be bidding against you.