Ownership of a position in a security is not ownership of the underlying debt, or foreclosed asset should that arise. There is structure in between that governs the distribution of cash flows, including potential ownership positions in foreclosed assets. If assets are seized, they are generally sold by the servicer as REOs with any received sums allocated towards re-payment of the security with its scheduled interest.
Owners of the tranches or security positions going for 5 cents on the dollar are unlikely to see a cent from an under-performing security (or the resulting foreclosures). They are often second or third in line to collect.
