A few hours since your question was asked & no one wants to tackle the answer. Well, here you go:
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.