Legal Question in Real Estate Law in Iowa

Not sure I understand the problem. You cannot lien your own property, so I cannot see how the previous owner would have any kind of lien position, unless you granted him a lien, either by a mortgage or vendor's lien contained in the warranty deed. If this was the reason you could not sell the house, and if someone actually did screw something up with regard to title, you might have a case against someone, but probably not the lender. Generally speaking, lenders do not have anything to do with clearing or securing title. It might be a closing agent, title company, abstract company, attorney, etc.

In any event, you should contact a real estate attorney in your area to review the relevant documents, and help you defend the foreclosure, if possible. I would be happy to discuss this with you if you are in the Quad City area.