Does landlord still own the house we are living in?

[Edith Colletti]

Several months after we leased a house in CA, through a rental agency. a few months into the lease we learned that the owner of the property was not making payments to the bank. We contacted the owner who admitted he was in default and we discontinued making the payment to him. We then received notice that the property has been been put up for auction. That has been several months ago and has been postponed each time to the next month. We have been staying in the property for several months expecting to get a notice to move. We assumed that it would be bought by an investor or become a REO property. We have not received any notice until yesterday. The landlord who claims that he still owns the property sent us a three day notice to pay or quit.
My question is : How does he still own the property when it is still on the sale pending list? And if so, does that mean we have to vacate in three days? Obviously we don't have the several back payments he is asking for?
We know we have to move and are prepared for that but we were taken by surprise that we didn't hear from a new purchaser or from the bank.