What options a junior lender has when property got foreclosed?

[Tek Chai]

After listening to a BiggerPocket Podcast #---, I've decided to do business with this Seattle's real estate investor/podcast guest, as a 2nd position private lender. He suggested if I'd want to consider as a JV partnership but told him that I'm not comfortable with the terms. Incidentally, there are a few other JV partners who are all looking for him, according to one investor, but he left the Evergreen state since early 2017.

Now, I'm hit hard with the reality that my 60K loan is at the mercy of the 1st position lender. On hindsight, I should have listened to my inner voice that if he could easily blew away his relative's money in the past, I should not have invested with him in the first place.

The 1st position lender have already initiate the foreclosure process. Auction sale will be at the Seattle's court house steps on 9/8/2017.

If you are in my situation, would you . . .

1. Payoff the 1st position lender 485K and foreclose the property yourself?

2. Go bid on foreclosure sale, win the bid and sell the property?

3. Do nothing and hope for the best if you can get all if not some
   your 60K back

I appreciate your comments and other solutions.