"Prior to seller receipt & approval of the full title package from foreclosure title to property will be conveyed by a quit claim deed"My basic translation,  "Before the seller gets the 55k, the buyer will be stuck with the possibility of liens on the property, 2nd mortgage issues, tenants, and other trash to be taken out before any exit strategy will be possible."

Disclosures concerning the property may have been made to the straw man that were never conveyed to the buyer.

A tax deed sale conveys ownership of a property to the highest bidder at a public auction, but it does not eliminate any liens or encumbrances on the property, including mortgages.

This is another great idea and I guess this is another thing I didn't convey very well in my initial post. 

This endorsement does not convey any coverage to the additional interest nor cost the tenant any additional premium.

If the mortgage being foreclosed is not the first / more senior mortgage, then the winning bidder has to deal with any more senior liens in order to convey clear title in the event of a sale. 

Since them I have dug deeper and found the irs is now requiring this information be conveyed to them.  

Yes sometimes the written word doesn't convey everything.

The statute also provides "Completed units (emphasis added) within each substantially completed building in a condominium development may be conveyed to purchasers . . ."

In addition, make sure that the security deposit is put on the closing statement, keys and anything else associated with the property is conveyed to you as well at or before closing