Need answers on Previous sale and Present Selling
Hi, this is my first visit. My question is, my house is in pre-foreclosure and I listed it with a real estate agent to try to sell it fast. I told the mortgage company that I listed it for sale and they said I still have to make regular payments or they can still foreclose. Is this true? I was told as long as I have it listed with an agent they can't foreclose. What is true? I need help. Just wanting to sell and get out of this house, we were lied to because the house was in worse shape than listed or that could be seen. The previous seller signed a declaration that the house was dry to the best of their knowledge and that there hadn't been any water while they lived here. Within one year we had alot of water, then it just keeps coming everytime it rains. When we put this house up for sale we had to sign something that said we knew there was some water present or that occurs. How did the previous seller get to lie and say no water problems when we bought from them? HELP, HELP, HELP! 
If he did know and he lied to you, and you can prove it then you can take him to court for the amount of damages/losses that he caused you.
I'm interested to hear other replies as well.
"I was told as long as I have it listed with an agent they can't foreclose."
That is an unequivocally false statement.
The most important issue is to be able to sell your home before it's lost to the foreclosure machine. If, due to the water problem, it won't sell at a price necessary to satisfy the mortgage, you may have cause for a mortgagee approved short sale.
Document the marketing and sale process and you may be able to (later, after your damages are established) revisit the inadequate disclosure issue. To do that, you'll need to have an historic appraisal performed to determine if, in fact, you overpaid for the house. After factoring in appreciation/depreciation, you'll be able to determine the extent of your loss and damages.