You can always offer them a settlement of the debt but what you are outlining doesn't make sense to me. If a secondary lien forced a foreclosure and subsequently bought it at auction, the first mortgage should be out of the picture having been paid off at the foreclosure sale through the proceeds of what was paid at the auction. Foreclosure laws are state specific so it may be different in California, but it still wouldn't make sense to me that the first mortgage would still be involved after the sale.
The seller shouldn't care less what the house sells for if they aren't going to make any money on the sale. You goal should be to find out who bought it and negotiate with them. Chances are not likely that they will sell it to you until after the redemption period (if you have one in CA), but you can always try. Get an agent who knows what they are talking about when it comes to Foreclosures and Short Sales in California and have them represent you in the transaction. Their help will be the difference between getting the house and wasting time on it.