Sad to say, but the answer is that the HOA was within its rights. The HOA did not agree to the short sale in writing. I think that you waited way too long to get advice from an attorney. I'm very sorry for the result. Good luck.
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The sad answer is that yes, the HOA can foreclose on their statutory lien. The Nevada statutes give significant protection to HOAs, and allow them to collect their assessments as well as collection costs and legal bills. What has happened is that the new buyer has title to the property, subject to the mortgage. If the buyer was the HOA itself you may be able to negotiate with them for a return of title in exchange for a payment of back dues and assessements. You may also be able to challenge the sale in court,but this is not a quick process.
I would recommend talking to an attorney who works in this area immediately.
In Nevada, HOAs have what is called a super-priority lien, which essentially means they can foreclose a house out from under a homeowner, and from the bank as well. Understand that the bank and HOA are not working together on this. In fact, in most cases, if the bank is properly notified of the pending HOA sale, they will pay the lien to stop the foreclosure, since this type of foreclosure takes the property away from them as well. Although the law is still gray in this area, most agree that the new purchaser takes the property subject to your mortgage, so they may be willing to sell it back to you. You'll want to talk to the buyer to see if they are willing to work with you.