query: does foreclosure wipe out a non-borrowing spouse's interest in property

Yes. I would hope, however, that you would have an attorney review the matter before the property goes to the sheriff's sale.

It is entirely possible that the lender did not account for the interest of the non-borrowing spouse and might have created a non-valid mortgage lien. If that were the case, the lender might have a claim against their loan policy as they may not be able to foreclose.