in Oregon the public cannot bid on tax sales they escheat to the state and then are sold as surplus.. but its so rare to have anything go in that state.CA will have a lot but 99.9% of the parcels that go are bare land.. with the majority of it pretty worthless strips or unbuildable lots.Wa you can buy at tax sale but again very few real parcels of value go and virtually no improved properties..In your area..

I have a feeling you are thinking otherwise, but the owner would not lose his/her equity in this property if the foreclosure goes through... rather he/she would be entitled to surplus. 

You don't receive any surplus funds that would be due to the owner after all liens are paid.

There is a surplus of them, as e-commerce is growing. 

Throw surplus cash out of state at cheaper real estate markets to try and get some form of passive income? 

I have a job that gives me a decent surplus of savings so I can afford to expensive than I currently pay, I will also being doing this with my partner.

My market has a surplus of apartments and a shortage of single family rentals but I understand your point.

Depending on the jurisdiction, surplus funds from an second mtg auction, assuming no other junior liens, either goes to the previous owner OR to pay off the 1st mtg......these procedures are state specific and may depend on judicial verses non judicial foreclosures.

Using that numbers it bring me up to a surplus of $137.30 each month. 

 No one knows what state you are in, so no one knows which state laws apply.But generally, a “hearing for the release of funds” means the property sold at auction for more than the foreclosing lender was owed, so it is this “surplus of funds” that typically the hearing is about to determine who gets the left over money.