Well, if the property foreclosed, the prior landlord isn't the current owner -- the bank is. Or, in your case, the city is as you say.
You'd be best served talking with an attorney, as Realtors can't give legal advice, but I think I'd find it difficult to make a payment to someone who isn't the owner of the property. Additionally, I doubt any court of law would award an eviction to someone who doesn't own the house.
For this reason, I make it part of the lease terms my clients sign that the sellers submit quarterly updates showing they are current on their mortgage payments.