Bank Foreclosed on wrong house... or so we think...

[DeAdria Wright-Davis]

I have a house under contract for 44k cash. ARV is 82k. Repairs estimate 10k. Rent estimate is $850 per month. This would be a buy and hold. The house was listed in the mls and seller was selling because this house and a smaller house next door was wrapped in the same mortgage that was being foreclosed on. We did our title work and found there was no mortgage on our deal, only the house next door. We then spent money on a survey and inspections only for the seller to say she did not want to sell because if the house had no mortgage she no longer wanted to sell. So fast forward a few days, now the seller does want to seller but her agent says the house was indeed foreclosed last week. Turns out the mortgage and foreclosure has the address of the house I have under contract but the legal description is for the house next door. My attorney is advising the seller's agent to get her own attorney to challenge the foreclosure but this seller is elderly and disabled with little means so I doubt she would fight it. I'm concerned about long term title issues. Should I just walk away and cut my losses? Or fight for the deal?