I don't think you are supposed to make ANY assumptions.  The facts of the question disclose that cyclist had a valid recorded lien and he was not joined in the foreclosure action.  Thus, his lien was unafffected by the foreclosure.  Those who were parties to the action would have been paid in order of their priority, and the purchaser would have  taken subject to the cyclist's lien.

The problem that most of us had with this question is that we made assumptions based on how things ordinarily work in real life. 

Best,
Robert A. Franco
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