Legal Question in Real Estate Law in Massachusetts

I am not sure if I understand you. It sounds like you were facing foreclosure and, to avoid foreclosure, agreed to transfer the house to a third party with better credit who took a new mortgage on the property. However, you likely would remain living there with an understanding that you would pay the mortgage (or maybe proceeds of the loan would pay the mortgage for a period of time). However, the straw buyer went into bankruptcy and the mortgage lender came in and foreclosed on the property. I am not sure about a different bank buying the house and what you mean by the bank being liable for a bad note. If the house was foreclosed upon and sold, the purchaser would not be liable on the note, the borrower would still be liable for the deficiency. You say you have a class action for predatory lending. If I were you, I would make sure you contact the Mass. Attorney General's Office. They may be able to help you.