Of course they are.  THey are responsible for the return of the deposit as well.  The catch is, if they are losing everything, try to collect it.  It may be near impossible.

Thats a tough one.  I think that they probably should communicate better with the renters...

Yes this should be addressed in the lease at time of renting the renters should have a clause about them getting their deposit back no questions if the home is foreclosed on.

Hi Shaun,

You pose an interesting question.  I could debate this issue from both sides like any true moral or ethical issue.  There are no laws in place that dictate right or wrong on this issue.  This is the type of thing that makes you go hmmmm!!!!!

I would be very interested to hear about others thoughts on this issue...personally, my thoughts would probably peeve off the majority of people....depends on what side of the fence you are on...the have or the have nots ;-)

I as we have seen that happening.  It is a bad situation when these poor renters are forced out of homes because the bank isn't getting paid.  I think that there should be some sort of third party involved in all rental or leases to have funds sent there.  At least the renters would have a piece of mind that the mortgage was getting paid.

In California banks become jointly liable with the foreclosed investor to return a tenants deposit.  Most tenants don't know this and it doesn't come up.  Bottomline is if a tenant has good records and proof, they can at least recover that much.