What happens to HELOC's/Assoc fees after a Sheriff Sale in NJ?

[Gregory Tibok]

Hi everyone. Hoping to get a solid answer to this question because I have been given conflicting information regarding buying properties at Sheriff sales. In our area it's becoming increasingly difficult to find flip potentials so I'm beginning to broaden my horizons (with caution obviously). This is in regards to NJ and I'm hoping to get feedback on 1 scenario and 1 general question: 

1. Townhouse being sold at Sheriff sale. Owner has a primary mortgage with bank A for $118k plus a HELOC with bank B for $17k. Judgement search showed nothing else outstanding. Owner filed bankruptcy prior to going to Sheriff sale and owed $10k+ to the association prior to filing.

At Sheriff sale bank rep stated they were prepared to bid up to $120k and true market value in current state was $145-155k every day of the week. Renovated is $165-175k. No one bid and bank purchased the property back for $1000. 

If someone purchased the property for $121k does the HELOC disappear? Also, what happens with the outstanding association fees?

2. Other than a judgement search, water/sewer, and delinquent taxes...what other due diligence should be done prior to bidding? 

War stories and success stories are welcomed! Also, I'm a investor friendly local Realtor specializing in the Central Jersey market so if you need anything please don't hesitate to reach out. Happy Hunting!