I can share with you the situation when foreclosure is happening. My friend Tom was not able to pay mortgage for many years, and he was able to stop bank from foreclosing his house for so many years, and he was very glad to tell me that he not only do not need to pay mortgage payment, but also not need to pay property tax on his 4,000+ sq ft house in Northern Jersey.
That was during real estate was really bad during 90's, so I told him that he just need to be prepared as soon as real estate came back up because bank was kind of got their hands full, and using him to watch the house, at least he would pay the gas and heat to keep up the house during winter time.
He then kind of forgetting the fact that he did not pay mortgage payment and property tax for so many years till one morning he called me couple years ago when real estate was booming again. He said, bank finally showed up, together with sherif, police, moving company ...etc to move all his stuff to 3 huge storage that bank paid for one month. He was so panic that during one month he would have to get all his stuff out of storage, or would be auction.
Of course, the foreclosed house double the price, and the bank sold the house with all the accumulated mortgage payments and property tax back in addition to the mortgage amount. Bank was fine then, losing nothing.
So, I told him to calm down and make sure have a cell phone and Post Box opened so that all mails and bills can be forward over. In the mean time, since he already over 55 years old, he is qualified for some great rental with discount rent (1/3 of the family income)
Then, he went out to do what I told him, and he later called back that he got lots of great apartments with new carpet, painting... and almost half market rent to move to. So he moved most of the needed items over to new place and gave many unwanted to friends, and kept some in a storage. He seemed to be fine.
because by the time all these years passed, his son already graduated from college and had a high pay computer job, and his daughter also graduate from law school and married.
It was like bank helping him to "downsize". So, there is nothing to panic about, just needed to be prepared. But, as some expert said, paying rent on time to your landlord has NOTHING to do with the bank foreclosure. You can always find quick rental from craigslist.org free.
This reminds me another case to my other friend Joan who bought a new home in 90's when he was not able to sell her old house so rented out, but then her husband was builder later did not have much job, and even when mortgage rate collapsed then like now, they were NOT qualify to refinance from 10% down to 3%, so she babysit 19 kids home trying to strive the payment.
Eventually, she was not able to handle both payments, she use the rent of old home to pay the mortgage of new home (hey! this may be the situation of your landlord, so he use your on time rent to pay his current home's mortgage, but NOT the one renting to you). When I was trying to help her to sell that rented house, I could not believe my eyes, it was rented to about 20 immigrants, each room has at least 4 twin size mattress, and even attic has 2 mattress; there were at leat 3 families renting together.
Then she was so panic and could not handle that old house but simply using the rent paid to cover her own home's mortgage payment.
NOTE: McCane, Obama, Hillery or even President Bush, if you happen to read Trulia.com and saw this case, I want to tell you that recent collapsed of mortgage rate would NOT help 2 millions American families like my friend Joan in 90's. Why? the rate was then 3% but Joan's mortgage was 10% and her husband was builder not qualified for refinance.
If bank or government let them to finance with 3%, then their two houses should have been fine, and, be honest, years later, they could have made half millions on house appreciation, but too bad, Joan's home was sold at a loss, and rental house was foreclosed.
Legally, you can work with your landlord to defend the house. Any legal procedure in this country can be postponed with cause. e.g. if you look at foreclosure notice in any newspaper (now as easy as on their classified ads online), and make some phone calls to follow them, you will see normally court let TWO consecutive excuses; that is to say, the foreclosure schedule may be rescheduled due to owner sick or other ligitimate reason.
Tom told me at the time he was so panic, and he found someone on the news advertise for $2,000 tuition to teach "how to prolong the foreclosure procedure legally", and Tom said he had no choice to pay for that tip, and he was then able to prolong and postpone for so many years till kids all left.
Logically, if you were the bank, and you got thousands of house to foreclosed, you got to have some "order", so you may try to foreclose those easy ones first, right? I guess that's the tip, be the last ones to save some time ...