Does your daughter know who now owns the home? It is common practice for foreclosing lenders to bid at the foreclosure auction themselves, to make sure the property doesn't get sold for too low a price. Think of it as effectively setting a reserve price. If the seller's lender did this, it may well now own the home - and it might be happy to sell that home to your daughter if she gets in touch and asks. Could be worth a shot.
The state is Texas.
I looked it up, and apparently most foreclosures in Texas are nonjudicial (carried out by the lender without any outside participation such as from the court system). I found this description of the only public notice requirement for nonjudicial foreclosure sales on this webpage courtesy of a Texas lawyer:
"Notices of foreclosure sales must be filed with the county clerk and posted (usually on a bulletin board in the lobby of the courthouse) at least 21 calendar days prior to the intended foreclosure date. Notices are entitled "Notice of Trustee's Sale" or "Notice of Substitute Trustee's Sale." They provide information about the debt, the legal description of the property, and designate a three-hour period during which the sale will be held. In larger metropolitan areas there are foreclosure listing services which publish a monthly list of properties posted for foreclosure."
Except possibly in times of extraordinary foreclosure activity, I doubt that checking the foreclosure/non-foreclosure status of listed properties repeatedly (it would need to be at least every 21 days if the goal is to prevent what happened here) would be considered a requirement for real estate agents to do a proper job. I'll guess this seller kept his problems secret from the realtors (who would probably have refused to represent him if they'd known), and sellers like that are probably fairly rare. I think listing agreements typically have a clause where the seller warrants that he/she has the right to sell the home on the terms in the agreement - mine (in WA) certainly did.
Unfortunately, that leaves the seller as the one clearly at fault here. The problem is, he might not have any money to pay your daughter if/when she wins her lawsuit.