Nothing was done because she’s a horrible tenant, it’s just a personal issue that requires me possessing the property.  

If the bank went through an actual foreclosure sale, you would have had redemption rights unless you failed to vacate within ten days after a demand for possession.

In Panama you need to be especially careful to AVOID buying any ROP (right of possession) properties. 

Though in CA, 5 years delinquency on property taxes, the city can file a lien and auction off the house.If I pay those taxes, what's the process of if I wanted to take possession of the property after the 5 years delinquent taxes?

Overall they WERE problem free tenants until yesterday when we received a letter from an attorney stating one of the three brothers has been arrested for possession of child pornography. 

Often the person being foreclosed on is still in possession of the property - so that becomes the next thing you have to deal with if you win the auction.  

Never buy a Right of Possession, just never do that.

I am familiar with the step-up rate, and I honestly think she will be selling for very little if any more than what it's currently worth when she took possession of it this year. 

If I need to take possession I just record my quit claim deed.

NW typically does a high pressure fast escrow tactics... even have you bid against other investors... often double escrows... and sometimes even delayed possession.