This means as the loss mitigation department is working with the owner on a short sale approval, at the same time the foreclosure department is moving ahead with the foreclosure process.
If the home actually fails to close escrow before the foreclosures process is completed the home can be lost to forclosure.
This is a sad case of one hand not knowing what the other hand is doing and the home owner gets burned.
Kawain Payne, Realtor
If a short sale was approved, the bank can't sell the property at auction unless the parties to the short sale did not adhere to the terms of the short sale approval letter. An example would be: going past the approved close of escrow date for the short sale, without getting it extended.
It is possible to reverse the sale, if it recently actually DID sell at auction & you were within the terms stated in your short sale approval letter. (email me if that happened to you)
If your short sale was approved & you actually did already close escrow. NO the bank can't just sell the note.
Please email me directly with details, you've got a strange situation & I don't feel as though I'm giving you all of the correct & detailed answers you need, through Trulia.