Foreclosure sales happen when a home-owner can no longer keep up with mortgage payments and the financial institution/bank/mortgage company decided to sell off the property in order to get back some of their investment.
For a family involved in a foreclosure, they would need to be give-up their house since it will no longer be considered their property.
If the foreclosure is available to generate some surplus funds, junior lien creditors would be the first ones to get be paid. This can include, second mortgage lenders or judgement creditors.