Recission of Trustees Deed for "Moral Reasons"

Hello,

In CA we purchased a property at a Trustee sale about 5 weeks ago. We recorded the TDUS. Later the Trustee said the beneficiary may opt to rescind the sale due to an error.

The attorney for the Bank has been calling me and has been all over the place in his statements. First attorney for the bank stated that the former owner has no leg to stand on regarding a loan modification. Now Attorney for Bank is saying that since former owner has 5 kids, they feel they should rescind the sale for 'moral reasons'.

My question is, if he had 4 children would that be moral reason enough? 3, 2,1 ??? Where is the line drawn?

I think the bank screwed up and wants to get out of a pickle and are hoping for us to agree to the recission versus a unilateral recission.

We submitted our costs, including cost of funds. Originally, Attorney for Bank stated it all looked reasonable now their tune is changing to we only need to pay statutory interest of 7% for the time we held you funds, you (innocent 3rd party purchaser) can eat the rest.

So, our choices seem to be take a crappy low 'payout' in exchange for agreeing not to sue, or take nothing and retain the right to litigate.

Suggestions and opinions of the matter as well as the statement of rescinding the sale based on 'moral reasons' would be welcomed!!!

Attorney for bank began a verbal vomit regarding the 'election to sell' ... my though is that the bank should have considered matters before electing to sell and bringing in an innocent 3rd party to the mix.

Side Questions ...

1- Do folks consider this to be a fair housing matter???
2 - If Bank sits on its duff, would it be best for us to proceed with the UD until such time as the bank actually does something?