Journey of a newbie 2nd lien owner-Foreclosure Sale Question

[Sandy Uhlmann]

I purchased a note in 2nd position several months ago. HELOC with original amount of $100,000 UPB of approx 75,000. First is current with UPB of just over $100,000. House seems to be worth $170,000+. Homeowners current on 1st as per checking the automated system of WFHM. Shock package sent, along with many letters. No attempt by homeowners to contact my company. Doorknockers sent out (NCCI) with success. Homeowners confirmed that they received the shock package, told door knocker that they were "underwater" and that a contractor had stole $80,000 from them, and that a lien had been put on the house as a result from a cabinet maker whom never got paid by the contractor. They told door knocker that they were "saving up money to move." They would not give the door knocker any updated contact information. I did some checking and I don't believe that the contractors lien exists anymore as they needed to renew it on a yearly basis and they have not renewed since 2012.

I have tried to call them with numbers I was able to get from their insurance company.   (I sent them my AOM and they added me as additionally insured)  Voice mailbox is always full.  I believe I know where they work but I do not want to contact them there.  (Fair Debt Collection Act scares the crap out of me!) Demand letter sent by my attorney, expires December 31.  If we do not hear from the homeowners by Jan 4th, my attorney plans to prepare a Trustee's Notice of Sale to be posted at the courthouse, and in the local paper for 4 weeks prior to the auction date.

I realize that (hopefully) we will never get to the auction but if for some reason the sellers never decide to communicate on this issue, I have some questions on how to proceed.

Does the junior lien post the minimum bid at the amount they are owed only (UPB + Arrears + legal fees) or do they post minimum bid at the amount to cover both the first and second liens? The amount of my second including arrears and atty fees will probably come up to around $100,000. If it sells for $100,000 (because someone doesn't do their homework and bids on the second, thinking it is the first) can they walk away from that bid after finding out that it is a second, and I end up back where I started with the second in my possession or do they have to pay in cash and now they own the second, subject to the first?

Additionally, is the second required to notify the first of the foreclosure sale since it is junior to it?

Thanks in advance for all the responses.  It is so nice to have such a supportive, giving, and knowledgeable community of people to be available as a resource.