If the deed is faulty then it will need to be corrected at some point but that does not mean they aren't allowed to go ahead and send you the 21-day notice to let you know what they are going to do (i.e. put it back through the foreclosure auction next month). Then perhaps they will correct the problem with the filed deed during those 21 days, or perhaps the new deed that gets filed after the new foreclosure will have language in it correcting the old deed.
If you are trying to prevent the foreclosure of you home then there are some ways to do that, including Chapter 13 bankruptcy where you can pay off the mortgage arrears very slowly over 5 years.
However, the mortgage company loaned you the money in exchange for your promise to pay (the Promissory Note) and a lien to back up your promise (the Deed of Trust). The mortgage company's lawyer's mistake in your situation does not mean the mortgage company can't take back their collateral. The mistake makes it a little harder for them, but they can still do it.