Cosigned on Second Mortgage (HELOC)

Background:

We purchased a home a few years ago with my parents and I on the title. Only my parents were borrowers/co-borrowers on the main loan. I did however cosign on the HELOC.

Long story short - my parents both lost their jobs and couldn't continue making payments on the 1st loan however I continued to make minimum payments on the HELOC since I co-signed it and I didn't want that to affect my credit.

Now the 1st mortgage is foreclosing on the house and we are trying to negotiate a short sale for this - my parents do have an attorney.

At the same time I am trying to buy a home now (just sold my current home) and I am concerned this is going to affect me very badly:

1] No The auction date is June 22nd - and if that does happen does my credit get ruined although we are current on HELOC payments?
2] I am trying to close on my home and this should happen shortly after June 22nd - if my loan does get approved in the next few days will it get cancelled post june 22nd? IS there anyway for my loan/mortgage company to find out what is happening to my parents home just because I am on the title?