Once the Certificate of title (in FL) or Sheriff's Deed or Trustee's Deed (name depending on state) is recorded and the parties of interest (lien holders) are notified, you will be on the hook.

I thought things were progressing well on this deal then the lender just told me there wasn't enough equity on my PFS vis a vis the house in question. 

However, I am having some difficulties because I am under a G4 visa and do not pay taxes, my company is pretty new.

A prospect for the duplex may have not been looking at your 6 plex and visa-versa.

Now, it can depend on a number of factors, such as: what state the property is located in, whether the new owner intends to occupy the property or not, whether the tenant is Section 8 or not, whether the tenant is related to the previous mortgage holder, whether the lease was entered into before or after the previous owner obtained the mortgage, etc. 

The interested parties (homeowner, mortgage co or lien holder) have the right to redeem the property all the way up until the tax sale foreclosure case has been completed (Judge signs order).

They should have an insurance policy that lists you as the mortgagee and I would also be added as an additional insured and certificate holder.

The numbers don't seem to line up with that however, so the IRA account holder could potentially have some issues.  

A couple of weeks later, I found out that the auction was actually for a second mortgage and that the primary lien holder was now foreclosing against the guy I lost to.

For instance for note holders/1. what if your borrower neglects to pay property tax's you as note holder must pay them if you don't want to be wiped out at a tax sale..