Simple answer is that the property had other liens that would not have been cleared making this a losing proposition. Just look at the plaintiffs, they were a private party, not a big bank. So this tells me this was not a first position mortgage, and there's another large mortgage here.

If you are interested in ff you’re bidding at a foreclosure sale on a second mortgage, you need to understand how the payout waterfall works. The clerk doesn’t apply overages to the first mortgage balance. The foreclosure sale is only wiping out the second lien. If bidding goes higher than the second lien’s judgment amount, the overbid (also called surplus funds) is held by the court registry. By statute, those funds belong to the homeowner and any junior lienholders who file claims, not to the first mortgage holder.

The first mortgage stays in place no matter what you bid. You’re essentially buying the property subject to that first lien. If you want it paid off or reduced, that’s on you after you take title.
That’s why most investors only bid on second liens when the equity margin is massive and they’ve double-checked title. You need to factor the full payoff of the first mortgage into your max bid calculation and treat any surplus as gone, you won’t see it again.

Bottom line: bid as if you’re writing a check for the first plus your bid amount, because that’s the real cost of acquisition. If the numbers still make sense with that assumption, then you’ve got a deal worth chasing.