Home should be my inheritance, but Step mom let it go into litigation-foreclosure. What can I do?

Sean,
My father died 8 years ago in Texas. No will, no trust and nothing was ever probated. His mortgage was originally a home equity loan through Countrywide that BOA inherited through their purchase of CW. The mortgage was ONLY in my father's name with his wife (my step mom) on the title per state laws. In Texas we had 4 years to open an estate. My step mom has paid mortgage for the past 8 years until February when she fell ill. It has always been a verbal understanding that she would live in the house until she died and then the house would go to me adn my brother. (It is the home we grew up in and she only lived there 11 years) She vacated the property and the house is in litigation because of the home equity loan. We have contacted BOA and tried to get them to work with us. We want to get the home, but it is in such terrible repair it is not worth the $65,000 owed on the mortgage. BOA will not talk to us. The want us to submit letters of administration or to submit head of estate paperwork. We have passed that statute of limitations. I was told that the best thing for us to do would be for it to go through foreclosure and auction, and then let the bank get it back from auction and then us purchase it from the bank. We are scared to loose the property, but wa also don;t want to make a wrong move and be stuck with property that has a title issue since now everyting is trying to get turned into "the estate of" and its too late per Texas law. Any wisdom is greatly appreciated.