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The scenario is playing out all over the country because so many foreclosed homes are rental units bought by speculators before the market fell.

There are also horror stories out there of tenants paying sizable chunks of cash into lease-to-own and lease-option arrangements and then getting thrown out and losing their contributions. Once a home has been seized and the title transferred, all leases and other arrangements made by the previous owner are usually off.

As you've discovered, rental-unit owners or their property-management companies have minimal (if any) responsibility to inform tenants that the home or rental building they control is going into default.

Alas, you may only have a small chance of getting your advanced rent and deposit back -- with any speed, that is. You can certainly take your soon-to-be former landlord to small-claims court, but such redress will no doubt be slow given the owner's financial position.

There's another option. You might offer to assume the loan if it's not too top-heavy or buy the home at a discount in a short-sale arrangement if you can muster up a down payment and have decent credit. Or you could try to contact the lender, who may be buying the house back anyway, and discuss your wishes to remain as a tenant (rarely granted, unfortunately).

If an individual buys the house, you could immediately express your desire to stay and see if something can be worked out. Of course, these approaches are fraught with many "ifs."

Meanwhile, you may have more time in you present rental than you think. If you haven't been named a defendant in the foreclosure and a marshal hasn't served you with a summons and complaint, the bank can't start the process of throwing you out.

At worst, you probably have 30 days after such a notice, but sometimes those proceedings can take months. You'd best call your local county or city housing office to be certain of your rights, which can vary widely. Most times, renters are still obligated to lease terms as long as landlords still hold title, regardless of their financial state.

As for "screening" your next landlord, in itself an ironic role-reversal, a Licensed Realtor can check to make sure the property is NOT in preforeclosure or foreclosure before an offer to rent is made.