They go into the secondary draft.
Server requires a password. You can only get the password from a House leader. Therefore, you must belong to a house before you can log in.
Those who miss both drafts and want to join after the server started must see Hooch (or people he designates) to be allocated a house. House allocation will be first be done in consultation with the House leaders, but essentially it will be whichever house has the least number of players.
I will turn you over to Kroma and let his olfactory sense of smells have his way with you if you are not careful.