You need to consult with an attorney immediately. Readers should know that real estate law in relationships to encroachment and trepass is complex and there could be a lot at stake. I am not qualified to advise you, but I do know that it is imperative to act sooner than later. If you need a referral I have two attorneys with REAL ESTATE experience I can suggest.
It may be a fortunate thing that the property is bank owned. You need to act before it is sold.