HOA had liens on property, the lawyer says the bank foreclosed on first. Now he tells us that this "will wipe out our lien ?

It may be true. Assuming that the bank's lien is superior to the HOA lien (that is, it was filed first) and the property isn't worth enough to cover both liens, the HOA lien would be "wiped out," because the first lienholder has to be paid in full before the second gets anything.

Depends what he means by "wipe out." Did he mean that the HOA lien would be paid off? If that's the case, he's probably right, since In Michigan, liens for homeowners association dues in the case of condos are usually superior in lien position to the first mortgage REGARDLESS of when they occurred. (So are mechanics liens or liens for any repairs or construction work performed on the property.)