Tim, Hold on a second!! I don't know for sure how the sale of a property is done in Texas, but in California, no lender is going to put a new mortgage behind existing leins,. They all get paid in the sale of the property and unless something is very odd, the buyer has an owners title policy to insure that they have clean title. Back HOA and other unpaid items will get paid by the seller on a short sale and if it was a foreclosure, they get wiped out by the foreclosure.
I am also seeing a trend on foreclosures that they are notreally going at a big discount. Short sales while they do take longer, ofter get the buyer a better deal. With a short sale, the buyer also gets full disclosure fork the seller as in most cases they are owber occipied and even if they ar enot there are still seller disclosure regarding the condition and usually the seller even if they did not occupy the property, does have knowledge of anything adverse that might have happened.