Okay, first you need to know if you will qualify to buy the home. VA and HomePath (Fannie Mae Foreclosed Properties - which I do not believe this is yet) have zero down programs. There are also some first home buyer programs and grants that you may qualify for.
You will need to have a credit score of at least 580 to qualify. You will also need to have a debt to income ratio of a maximum of 33%. This ratio will include your future mortgage payment, taxes, insurance and private mortgage insurance.
Your best bet is to go talk to a lender to see if you can pre-qualify for a loan - this will help immensely.
Second, since the home is in default, you have two options. Option #1 is to pay off the balance on the mortgage including all late fees, penalties and past interest. If you are unable or unwilling to do that, then you will have to work with your landlord AND their lender to have a short sale approved. This can be a long drawn out process so be prepared to be patient.
As to your security in living in the home; you do not have to buy it to get security. A lease is a legally binding agreement that passes to the next owner after a sale or foreclosure. A new owner cannot just nullify a lease. If you are in, lets say a 2 year lease with 2 renewal options - guess what? As long as you keep up your end of the agreement, your residency is secure.
There is an exception, which you can read about here: http://realestate.msn.com/article.aspx?cp-documentid=22789901