Call a local attorney immediately. Consult with the police too. I kind of doubt it was really the police; they would know all the remedies that a tenant would have. You have significant rights as a tenant in California. Get a lawyer with the spine to help you.
IF they chose to pursue you, it is likely that the homeowner's association could get a judgment for unpaid fees. However, they may choose to look at it as throwing good money after bad. If you are worried about this, you might be able to negotiate with them prior to making up your mind about what to do.
I would talk to someone who can check into the relationship between the trustee and the bank. I think the trustees are the PRIME target and very few people are focusing on them yet.
So many of these trustees are also lawyers for the bank. It seems to me that there may be interesting reasons why they chose one buyer over another. Worth checking into.
I would suggest you call Ice Legal in Florida. I have no connection with them, other than to be impressed with their work in foreclosure cases. I would say they would be as good a place as any to start.
This is important. Get an attorney in Florida to review it. It needs to be seen in terms of the entire agreement.
Also, there very well may be tax consequences, as alluded to earlier. I have written a guide on short sales that you may want to refer to.
You have an attorney in this case. Unless there is something dreadfully wrong with that relationship, I think you need to trust him or her and take their advice. Make sure to talk to them until you understand everything you need to.