Is the first mortgage foreclosing, or some junior mortgage or lien.

In addition to prior lien holders you'll also take title subject to any junior lien holder who were not named and/or served in the foreclosure. 

If there are any junior liens, and since you state you are the senior lien holder, accepting a DIL would leave all those junior liens in place for you to pay off, whereas foreclosing from the senior-most lien position extinguishes those junior liens.

@Bill Gully - Getting deed-in-lieu can be a good strategy but we need to keep in mind that junior liens are not wiped out with DIL as they are with a foreclosure action. 

My other partner that markets shortsales found the home owner last year and we refered to a hard money lender to save him from foreclosure on his 3 junior leins.So on this deal we will give 15k and a monthly payment for the remander of his ballance maybe 500 per mo. for 100 months and hopefully get control this week.The truth is we put a first right of refusal on all the notes we pay.  

This studio/junior one bedroom used to be the primary residence for my wife and me, but with a baby now in the mix we moved and found a great tenant.  

If nobody else bids, then the bank "buys" the property back, cleansing the property of all junior liens, evicts the former homeowners and lists the property with a Realtor who specializes in REO (Real Estate Owned) on the MLS or Hubzu or Auction.com, etc. 

Is it possible to inherit the junior liens by mistake if you do it this way instead of waiting until after the auction?

My Junior year I launched the UNCW Real Estate Investment Club on campus, and this is a registered organization. 

My Junior year I launched the UNCW Real Estate Investment Club on campus, and this is a registered organization.