I don't have an answer - but am in a similar situation in Hesperia, they posted the "Notice of Trustee Sale" on my door on 7/1, house will be auctioned on 7/21 but for way over what the house is worth. When we moved in we paid first, last and an extra month's rent because we didnt have good credit. The landlady wrote us a letter saying we were paid for July and she wasn't going to give us our security deposit back (which was the extra month's rent) and that we might be able to stay in the house for the month of August. I am getting all kinds of stories in regards to foreclosures and banks taking over properties, what I want to know is can you deal with the bank to continue paying rent? and - how long does it actually take before the bank kicks you out, I've heard anywhere from 3 days to 12 months. What happened in your situation? Do we have any rights?

I'm not a lawyer, so this is not legal advice. And you'd be well advised to check with a lawyer. OK?

Having said that, right now you have a valid lease with your landlord. Check with a lawyer to find out what he recommends. It might be to pay the full amount to the landlord, or it might be to prorate the rent--pay the landlord a partial amount and put the remainder in escrow. And, though what I'm offering is not legal advice, if you do, as you say, "put the rest of the rent aside," check with a lawyer, who very likely will recommend putting it in escrow.

As for your $1,500 deposit, that depends both (legally) on your local laws and (practically) on what the owner is able to do. Again, not legal advise, but legally the first document to look at is your lease, and under what conditions the deposit is refundable. And local laws will also apply. But, OK, the landlord hasn't been able to make mortgage payments for awhile, and is getting foreclosed upon. As a practical matter, it's doubtful he has the $1,500 to refund to you. And if he did have $1,500 from somewhere, he probably has more pressing needs for it. So, as a practical matter--totally apart from the legalities--you chances of getting that money back aren't great.

However, a lawyer should be able to advise you on this aspect, too. Some people facing foreclosure file for bankruptcy. That can delay foreclosure, so long as they comply with the terms of the bankruptcy. It's possible that you'd want to file a lien for your deposit prior to the bankruptcy. Again, sigh, I'm not a lawyer and this isn't legal advice. But it is something to ask a lawyer about.

It's possible that the bank will delay the foreclosure. What the owner is talking about is a "short sale," in which someone offers to purchase the house for less than is owed on it. In that case, the lender plays a role, deciding whether to accept an amount less than is owed. If the bank permits a short sale, the whole process can take months. But first the owner has to receive an offer.

So: Check with a lawyer. And face the likelihood that you'll probably have to move. You might begin looking now.

Good luck.

You should seek legal council, no kidding. Some cities have free legal aid services if needed. Licensed Real Estate agents can loose their license by giving legal advice.... as poor as that may sound, sorry. Since I do property management I can give you my 2 cents worth, but remember I am in Washington State.

1. You owe the rent, just pay it but get a receipt. You are not really sure when the bank will take over, if ever really. The owner could possibly forestall the bank... my Lawyer has a way to forestall Bank Foreclosures within hours of a client loosing their homes. It works.

2. Banks will normally realize and see that you have met your obligation and in most states by law, they cannot just kick you out. They must give you legal time and notice by Federal Law as well. Only an Attorney could tell you for sure.., but you should get full credit for paying your rent as agreed even if the owner looses control mid month.

I am sure all will work out fine. There are more rentals in general it seems now as investors buy these properties for rentals. I know because I do.

Have a great day,
-Don