It is common for real property to have multiple liens against it. The primary or "senior" lien is typically a mortgage lender. Subordinate liens may have attached to a property through loans or judgments awarded to other parties unrelated to the primary lienholder.
Foreclosure is a move by a lienholder to recoup its equity by compelling the sale of the property. My understanding is that once approved by a court, foreclosed property is typically sold at auction, and the proceeds awarded to the lienholders in order of lien seniority. Any liens not satisfied by the sale are removed from the property.
My question is: Do subordinate lienholders have any rights or means, either in law or in practice, to object to a foreclosure in which they fail (or might reasonably expect to fail) to recoup their lien?
For example, suppose a mortgage company has a $400k lien on a house and a creditor has a subordinate $100k lien. If the mortgage company forecloses it is only looking to recoup $400k. So it has no incentive to try to sell the property for more than $400k, and it may put the house to auction with a reserve of just $400k. The second lienholder in that case might argue that it should have a $500k reserve, or not be sold at auction because of a temporarily weak market.