Foreclosures and the consequences, or are there any?

I got the information from AAR online realtor magazine. It is taken from their Legal Hotline section. This may help answer some of your questions on the Anti-Deficiency Statute. Also, if you are a tenant do you have rights if your landlord is facing foreclosure?

"Anti-Deficiency Statute Protects Borrower Only after Foreclosure
The lender approved the short sale, but as a condition of approval the lender required that the seller sign an unsecured promissory note payable over three years for the short sale difference of $30,000. The short sale transaction closes. The seller is now refusing to make payments under the unsecured $30,000 promissory note because the seller asserts that the anti-deficiency statute prohibits any deficiency after foreclosure. If the anti-deficiency statute does not protect the seller, the seller intends to file bankruptcy. Does the anti-deficiency statute protect the seller from a collection lawsuit by the lender on the $30,000 unsecured promissory note? If not, can the seller discharge in the bankruptcy the $30,000 unsecured promissory note?

Answer: First, the anti-deficiency statute only prohibits a deficiency action against the borrower after the foreclosure of a home and does not apply to short sales. If the seller agreed to make payments under the $30,000 unsecured promissory note, the anti-deficiency statute does not protect the seller. Second, if the seller files bankruptcy, the $30,000 unsecured promissory note will probably be discharged in the bankruptcy proceedings.

Tenant Obligated to Pay Rent Payments during Foreclosure
The tenant is a college student and signed a one-year lease terminating June 30 at the end of the school year. The landlord has not been making the mortgage payments, and the tenant received notice that a foreclosure sale is scheduled in February. The tenant refuses to make any more rent payments to the landlord because the landlord is not making the mortgage payments. The landlord has delivered to the tenant a five-day notice of non-payment of rent and intends to evict the tenant. Can the landlord evict the tenant if the tenant refuses to make the rent payments?

Answer: Yes. The failure of the landlord to make the mortgage payments is probably an “anticipatory breach” of the lease entitling the tenant to terminate the lease and move out. (If the AAR lease was used, the AAR lease, line 206, specifically says that the landlord is in breach if the leased property is “the subject of a trustee’s sale.”) Therefore, if the tenant wants to terminate the lease and move out because of the February trustee’s sale, the tenant can furnish ten days notice of the breach to the landlord and, if the landlord does not cure the breach, the tenant can move out. On the other hand, the landlord is entitled to collect rents under the lease agreement until the trustee’s sale occurs or the lender procures a court-appointed receiver. Therefore, if the tenant does not make the rent payments, the landlord is entitled to evict the tenant."