Seemingly clearly a criminal matter, but good luck getting the prosecutor to prosecute (and that's who I would be dealing with--not the police).
In Seattle I used to say that for them to prosecute fraud it had to be an amount over $100,000 or have a victim that was politically connected. In smaller areas they tend to prosecute more things.... more
There are different kinds of foreclosure auctions though. From my RE education, I understand that tax deed auctions will pay the prop tax, mortgages and more junior liens from the proceeds, and any liens left unpaid will be wiped out. But they don't give you clean title. It's still your own responsibility to pay a lawyer to make it clean for a small fee. For other auctions, if they promise you clean title, then it's supposed to be free from liens, but then you never know if something lurks around. With any auction, there is a risk of liens if the foreclosure was not done properly in the legal sense, or if there are foreclosure-specific loopholes favoring the seller.... more