Short answer. No. The rule provides that the sale shall not affect the rights of persons holding prior encumbrances upon the property or a part of it. A confirmed foreclosure sale divests the rights of the parties to the action, not those of earlier encumbrancers.
What the law says
Such sale shall not affect the rights of persons holding prior encumbrances upon the property or a part thereof
Rule 68, Section 3 — Sale of mortgaged property; effect. Read the full provision →
What the sale actually clears
When confirmed by an order of the court, the sale operates to divest the rights in the property of all the parties to the action and to vest their rights in the purchaser, subject to such rights of redemption as may be allowed by law. Read that carefully, because it works on the parties to the action. Someone holding a prior encumbrance who was never made a party is not among them, and the rule separately and expressly says the sale shall not affect the rights of persons holding prior encumbrances upon the property or a part of it.
What a buyer is really acquiring
A purchaser at a judicial foreclosure sale therefore takes the property as it stands with respect to earlier encumbrances. The auction resolves the mortgage that was foreclosed and the interests of those who were parties to the case; it does not clean the title of everything registered ahead of it. Anyone bidding should be examining what encumbrances predate the mortgage being foreclosed, because those are precisely the ones that survive the sale and will still be attached to the property afterwards.
Why confirmation matters
The divesting effect is tied to confirmation. The sale operates to divest and vest rights when confirmed by an order of the court, and that confirmation comes upon motion rather than automatically. Until it happens, the position is not settled. Possession follows a related timetable: upon the finality of the order of confirmation, or upon the expiration of the period of redemption where redemption is allowed by law, the purchaser at the auction sale or last redemptioner becomes entitled to possession of the property.
Two further limits worth knowing
First, possession is not unconditional. The purchaser or last redemptioner is entitled to it unless a third party is actually holding the property adversely to the judgment obligor, in which case the process does not deliver possession against that occupant. Second, the writ of possession is secured upon motion from the court which ordered the foreclosure, rather than by beginning somewhere new. Both points shape how quickly a buyer can realistically expect to take control of what was bought.