What happens between bank/note holder post-foreclosure?

[Mike G.]

Let's say a bank gives a loan on a house, but there is another entity that actually has the Note - maybe the entity loaned the money via the bank or the bank sold the Note to that entity. Then the property goes into foreclosure. What is happening in this case with respect to the actual Note Holder? Does the Note Holder (rather than the bank) determine the minimum bid price at the auction? And when nobody bids on the property and the bank gets it, what happens then? Does the bank pay the Note Holder that minimum bid amount and now the Note Holder is out of the equation?

I'm just curious as to how this works.