All correct. They want to cover the outstanding mortgage.

Once the property is listed in the public notice... you can find the starting bid by
a.) visiting the listed attorney’s web site... often they state balance due - starting bid
b.) checking the postings at the court house on day of auction - each "bank” will post a list of the properties for sale with a balance due and starting bid.
Be careful the starting bid does not included liens and taxes due to clear the title

They start the home at a minimum reserve price. This is usually what the bank needs to recoup their money and any fees incurred, or at the very least, a good portion of it. If no one bids, then the home will go on the market just like any other home. Many times the reserve price is actually higher than the value of the home, so you won't see anyone bidding. I would recommend going to an auction, observing, and asking some of the bidders some questions. Most shouldn't mind giving you some helpful advice.