The benefits of renting include not having to worry about maintenance of the property and not having to take on a mortgage, but you also have less control over your living situation. When a landlord fails to make her mortgage payments it has a direct affect on the building's tenants, and that effect is eviction. Even if a tenant makes her rent payments every month she doesn't have any rights when the building faces foreclosure, and there's nothing that states she'll even get her security deposit returned. Find out more about this increasingly common situation when you read more.
During the real estate boom (and the heydey of subprime mortgages) people were scooping up properties like second homes, investment homes, or rental property. Many of these hopeful investors' ambitions turned against them and have defaulted on their mortgage loans, making renters of those properties victims. According to RealtyTrac, a company that tracks foreclosures across the country, approximately 280,000 of the 720,000 foreclosed properties in the US are classified as "not-owner occupied." So, 38 percent of properties in foreclosure through the end of April were these investment-type properties.
While renters are innocent in these foreclosure situations, they have little to protect them from losing the place they call home and having to forfeit security deposits. Some states have begun introducing legislation that would protect renters from being evicted, but until something passes renters have to simply hope they won't be faced with foreclosure.