İf you had bought your house with the mortgage, it is legal that it may be sold in auction because of the debts of the former owner.Your acquisition does not affect 3rd parties' claims . You should have examined the title of the house and the land registry whether there exists a mortgage or such thing through which the immovable assumed obligations.

You may sue the seller of the house beacuse of your losses deriving from this acquisition.However, the issue of proof, especially to prove that you were supposed to acquire the title of the house free of any charges, mortgages etc, shall be vital in this case. Any written contract may prove to be extremely useful, in the absense of which you may not be able to prove your claims.You have also a right to recourse to the prosecutor's office on the ground of defraud.