Do I have any recourse that I can pursue to recover the monies loaned out to a friend of a friend and secured by a deed of trust on a property that just foreclosed.

Pay the FIRST lien OFF and assume title to the property.

Yes, if you have a 2nd or third mortgage on a property, and the first is foreclosed, seldom does the property sell for enough even to cover the first mortgage, so normally the 2nd will get little if any money.

But you do as noted have the right to pay off the first mortgage, and as the 2nd mortgage holder you would own the property, then you could try and sell it on the open market for enough to get your money back also.

Good luck maybe it will see well and you will get some money out of it