Yes, she can do whatever she wants with the money.
Your security deposit will be transfered to the new owners at the closing (if it sells)
Some banks offer CASH FOR KEYS which is a program to help renters of foreclosed properties to find new housing... They give you first and last months rent or a set amount to get you out of the building and into another one.
If you need help locating a new rental contact me anytime!!!
Clair F Bee II
Keller Williams Realty Capital District