It's still risky, but not nearly as risky as bidding when a junior lien holder is the foreclosing party.

The most important thing you can know going to auction is, "Who is the foreclosing entity", meaning, are they the senior lien holder or a junior.

Junior liens like this often need to have a cash contribution from the buyer to get them to release as the 1st mtg holder usually doesn't offer them enough, usually 5-10%, to get them to release.

My theory (Based on very little knowledge) is that since the liens are paid based on priority we should either be able to negotiate with the junior lien holders or the court will allow the property to be sold to satisfy as much of the debt, in priority, as possible.  

It involves attending foreclosure auctions and identifying any properties that sell for a surplus over the mortgage, lien and junior liens.

It's like Los Angeles junior out here. 

I had a realtor that push me off to one of his juniors and it was the worst experience ever.

Typically, a below market value price can be obtained and because the foreclosure process wipes out all junior liens on the property, the title to a bank owned property is assumed to be guaranteed clear and marketable.

@Michael Rosenson, you need to narrow it down, there are performing and non-perfroming, and senior and junior and each has its own rule of thumb, though I love the comment by @David Faulkner ignoring rules of thumb. 

If you purchased a first lien foreclosure (and it sounds like you did) then anything junior to that lien was wiped out.