Question for Seasoned Sheriff Sale Investors

[Joe Colasuonno]

There is a house I am looking to purchase at a sheriff sale in NJ. The ARV of the home is approximately $700k. The property has 3 mortgages against it. It has a first from 20 years ago who's face value was originally 300k. It has an equity line in second position from 15 years ago from the same bank (lets call them Bank 1) for 100k. It has an additional equity line in third position from 12 years ago with a 300k face value (Bank 2)

The 1st and 2nd mortgages are both in the foreclosure process.  The 3rd mortgage is delinquent but the bank has not begun foreclosure proceedings.  It looks like the 2nd mortgage will go to sheriff sale first.  

Is it typical that the Bank 2 would send someone to bid at a foreclosure sale of the home to protect their position?  Is it probable that the Bank 2 has already written off this loan as a loss and will not show up to the sale?

Looking at it from Bank 2's perspective, they would probably figure that without renovation, the home is worth around 450-500k as is in a worst case scenario, and would need to spend some money to get it sold, pay cash for keys, and any other costs associated with listing the home.  Not sure if they know the upset price of both the 1st and 2nd mortgages due to Bank 1 or if they would just see the face value of both at 400k.  

I know that every situation is different, and that there are always exceptions, but wanted to hear from some investors that frequent sheriff sales to see if its common for a big national bank in third position on a property to come and bid at a foreclosure sale.