I think I may have found my own answer... the above proviso only applies if we joined them in the foreclosure action.We never had the opportunity to do so, nor would we have been able to as they filed against US and the deed holder initially.So not sure what that does to the situation.

In a short sale, the lien holder whether 1st or 2nd has to execute a release of the lien(mortgage) to accomplish the sale.

I added the addendum because I wanted to see how hungry the seller (or potentially the lien holder) was to sell the home.I figured it could not hurt to try...

1st two digits of the case number is year when foreclosure was filedBuy only 1st lean holders, look for banks or financial institutionsAny outstanding leans after LIS PENDANTS - disregardIF many defendants are listed - stay awayLook for expired permitsLook for code violationsLook if the taxes are paidThere are more items that are related on doing the proper due diligence, but those are some major ones. 

Where we are at, the second mortgage lien holder can "forclose" and the new buyer of the second lien has 180 days to make right with the first lien holder. 

When the deed is filed the mortgage holder can then see the borrower is no longer in title to the property.

Other lien holders may get money, too.  

They are your go-to hand holder for everything.

Be aware that mortgage holder, and or other investors who may acquire the debt could foreclose at anytime until the statute of limitations runs out.

However, most companies in Ca will Interpleader the funds before the escheatment period (an interpleader basically an action by the Escrow holder to force a court order to disburse the funds and all costs for the same are liquidated from the funds on deposit).