The foreclosure expert attorney here in Hawaii (Gary Dubin) does something similar to this but not exactly as was mentioned in the article... I would have to go back and listen to that particular radio show (forslosurehour dot com) on his website to refresh my memory but I know he files some kind of motion (after summary judgement was granted to the plaintiff and prior to the trustee sale) which effectively notifies all potential buyers from that point on that the property has a clouded title.
This probably wont stop your pretender lender from buying it at the auction but it will make it extremely difficult for them to sell the home in the future because no title insurance company will touch it with a clouded title. It would not be fraud if you could show that the foreclosing bank used robo-signers or improperly transferred the loan or did not have standing to foreclose etc... Just because a judge grants the foreclosure in a summary judgement does not mean that the title is not clouded in one way or another.
As we all know, most judges only care about the delinquency of the loan payments and could care less about the bank's improper and frequently illegal acts leading up to the foreclosure.
Remember that the primary goal of the pretenders is to cover their tracks, to keep the paper trail buried of their fraud. Most of the title companies are in on the LPS system, so they have devised methods of providing insurance, while noting the exceptions in their paperwork. It does appear that the recording mess of clouded titles is something no one, including the recording offices is wanting to look at. Between the phoney buyers, the universal title company system, the passivity of county recording offices, the securitization was just the first chapter. The continued chapters undermine the entire recording system across the country, and no one blinks an eye that there are robosigned documents recorded. There are too many characters on the stage, all supporting this. But, we all know how flakey those title reports are. Wish it were different, but it is what it is.
Most people don't recognize that they can fight a fraudulent foreclosure after the sheriff's sale. (within statutes of limitations and with some proof)
As mentioned above, clouded titles are one reason (in addition to false inflation or maintaining paper value on balance sheets) why banks buy these properties back (via credit bid, no actual transfer of payment other than that required to bid at auction). They are washing title.
In the same vein, take the reverse scenario. Could you be committing an act of fraud by NOT informing potential purchasers of the clouded title? (ex-robosigned docs)