Auction Property old owner

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A Colleague who does realestate business in NJ had a auctioned property and looking to sale somebody with his profit as he was not able to pay all cash . I Brought the property from Sherrif sale which he redirected to me . Being new to the process, Didnt realize many things like getting a title insurance . It was sold by the Bank and a MultiFamily House . I did the Sale Deed , Tax also got updated . Hired a Property manager . It was Auctioned property so we never visited the House before . The Property manager informed the previous owner staying and still collecting rent from two other families . Pls Note- The Old owner foreclosed this 2009 and never paid a single after that and collecting rent . Tax paid by the bank . I was emotional and asked the property manager to let the old owner stay in Nov 2017 . For my Surprise There is a lawyer called mentioning the Old Owner suing me as I she thinks I owned the property illigally and put a case that she should own the Title . What Surprise me most , Somebody didnt pay a single from 2009 and collecting rent and still can dare to Sue where people like us loose sleep if we owe $500 on Credit Card . How this is possible . What law prevents it and Who pays for her ?? I did put a ejection in Hudson county but i have a feeling this is going to go for quote sometime .