waiver of deed restricitions

The 5 acres+house property next door to mine is pending foreclosure because it was illegally subdivided and cannot be sold as a legal lot. 1 acre was sold off (deed restrictions require 2 acre minimum)and so the city is denying both parcels legal lot status. A friend of mine tried to buy it, but was advised not to by a real estate attorney.
I have heard that a bank can waive the deed restrictions if needed to market and sell a foreclosure. Can anyone give me legal reference to verify this in Texas? Can this be done as part of the short sale or does it require the bank to go thru the foreclosure process first?