Short sale question

[Jim S]

We recently purchased a home thru a short sale. It's the first short sale we have done. We usually buy REOs.
When we were negotiating we had the most issues with the holder of the 2nd trust. They kept jerking us around asking for more $$. In retrospect, if the home had gone into foreclosure- wouldn't they have lost all of their $$ assuming it was the primary mortgage holder who filed?
How much leverage do the 2nd trust holders have?