I work with several investors. They will not disqualify a tenant based solely on a recent foreclosure. However, if the credit report shows collection accounts and/or multiple late pays, there will be a problem. Given the market we went through, it's understandable for people to have defaulted on their mortgages. It is not understandable, however, if a prospective renter bounced checks, couldn't pay his or her credit card, and let their cell phone go to collections. It depends on the individual situation.
If the only bad thing on a renter's credit is a foreclosure, I recommend that my clients move forward. If the credit report reveals a pattern of missed or late payments (except mortgage), I will recommend that my clients wait for a better qualified candidate.