The contract you had was with the seller and not the Bank in the short sale process, even though the bank needed to approve the actual short sale. The bank can, at any time, move forward with foreclosure. When this happens, it's unfortunate obviously for the seller, but also for those like yourself. Those that have offers in that have been accepted by the seller and are now no longer valid. The bank does not have to notify you personally of the foreclosure. They do have requirements to meet when foreclosing, but to notify all parties, that is not one of them. It is an unfortunate situation, but I would suggest that if you really want the home, but not at the price they are planning on listing it at, then watch the home closely, banks drop their prices often. If nobody else jumps on it when they list it, be prepared with your buyer's agent (I'm hoping you have one, because short sales and foreclosures can be tricky) to immediately submit an offer. I would also suggest that the offer you do submit is a strong one with few to no contingencies. I wish you luck.