I went to a junior college and got my associates in business for free through their presidential scholarship. 

I have an active flip going on in Merced right down the street from the junior college.  

Vikram,James is correct regarding the notifications; those second lien holders (actually ANY junior lenholders) have "collateral at risk" and are required to be properly served notices, or else the forclosure can be challenged.And you would be correct when you guess that the second lien holder can bid the total of the first and their second liens; since they hold that second, they only have to come up with enough cash to deal with the first lien.

We have one child going into college and one a junior in high school.

I'm a junior by the way (same name) and I had a broker's license.

If a taxing entity is foreclosing, they will likely wipe out all junior liens, so it is possible that a bank many defend their position and pay off the back taxes at an auction.   

How it works depends on the lender and what lender is the one foreclosing (1st or a more junior lender).What else do you know right now?

A new attorney joins a law firm as a junior partner and then specializes in an area under the guidance of senior attorneys. 

I am in junior year of my college and I really don't have time to look over my property all the time.  

They could be a junior, or senior lender, hence the higher total pay off.