Gifted property foreclosuing !

Hi Sean,
1st of all, I like to thank for all the education materials on this site which I find them quite helpful.
I have been doing title search on RadarID# 484796 and have a question.
When the original property owner A took the ownership of the house, she took out a couple loans for purchase at that time. Original owner A later transfered the property ownership to current owner B and now the original owner A’s 1st loan is in default and up for trustee sale. Will there be any issue for auction winner to take the ownership of the property since the current owner B and original owner A whose loan is now in default are not the same person ?
Any comment, or suggestion ?
Thanks in advance for your advice,

In general it should not be an issue, as when a loan is foreclosed on all subsequent transactions are essentially wiped out. As an example I bought a house at auction once that had just closed escrow days earlier, and it wiped out the sale and escrow completely. Since the title company had given the new owner title insurance, the title company had to buy the home from me to make good (it was their mistake as they hadn’t gotten the funds to the foreclosing lender quickly enough after escrow closed).

P.S. I didn’t review the property in question, I’m just speaking generally, and I always recommend consulting an attorney or title officer to be sure.