I am an asset manager and get calls from homeowners all the time wondering what happened because they thought they were going to get a short sale. The reality is that the left hand does not talk to the right hand at the bank which is why the home was foreclosed on. Your options are as follows
1) Stay in the home and let them evict you - 90 days
2) negotiate a relo assistance package for a couple thousand dollars depending on your home value - 14-30 days
3) get an attorney and try and rescind the FC sale... not likely, but it has happened
for more info you can go to my website at http://www.TheLaJollaLife.com
What you have to do is wait for the foreclosure to occur, then for the bank to put it back on the market.
Make sure your Realtor regularly monitors the status of the property so that you'll know when it's back on the market and you can make an offer.
Hope that helps.
As a buyer, your life just became much easier....the purchase process is much clearer and simpler with the bank as the clear owner of the property.
Find an agent and place an offer!
Your current contract is no longer in force once the ownership has reverted to the bank.
If you are still interested in the house, you can wait until it is listed for sale and submit a new offer. Or set your sights elsewhere.
As you now know, there are no guarantees in a short sale. So don't pin all your hopes on short sales. Keep your options open, and continue to look.