I can totally sympathize with your situation and I talk to tenants exactly like you multiple times per day! Renttoday.us is a property management firm located in Ontario, California and we manage hundreds of homes that have just gone to trustee sale and are now owned by the bank. The tenants are always very confused, frustrated, annoyed and some do definitely try to take advantage of the situation by withholding rents, stalling, and other tactics.
The bottom line though in your situation is that until the owner officially does not own the home anymore, you need to abide by the contract you agreed to which means paying the rent on time, late fees, etc. Unless his keeping the mortgage current was a contingency of your lease (which it most likely was not) then that fact is irrelevant unfortunately.
Once he actually loses the house and it goes to trustee sale, then you do have rights as a tenant to remain in the home on your existing lease as long as you are paying market rent, it was an arms length transaction, and the home is in relatively good condition. This means you shouldn't have to worry about being displaced or having to relocate unexpectedly. If you choose to move and the bank owns the home you may even have a Cash for Keys option which allows you to relocated and takes care of your moving expenses, etc.
In regards to the mold or whatever other repair issues there may be, you cannot withhold rent for those items unless you have given the landlord sufficient notice of the issues (documented in writing) and have given him "reasonable" time to get the issues repaired. If you did decide to not pay rent, the court wants to see that you have held those funds in an escrow account waiting for the outcome of the decision or you have at least held onto the money and will be able to give it to the owner as soon as he completes the repairs. So many times tenants withhold rent then spend it so by the time the owner fixes the repair, they can't catch up and end up getting evicted anyway! You don't want that to happen.
Look, there are a million rentals available everywhere you go in Southern California. Our website http://www.renttoday.us
has new properties every single day to choose from. If you are truly not happy and don't like the situation, then just move out and stop dealing with it. You won't win in court just based on the fact he was in foreclosure and it's going to take weeks to get a court date and a lot of time and frustration. It's your call but I would hate to see you waste a lot of time and energy and still get nothing resolved.
Hope this helped a bit and Good luck!
Mia Melle, Broker
Renttoday.us | West Coast Property Specialists, Inc.
Toll Free 888.927.7266