So my friends and I rent a house for $3200 a month and are on a month-to-month contract. Our landlord has not been making the mortgage payments and we got a notice of foreclosure last month. The house is currently on the market for short sale. We do want to live in the house for as long as we can. The landlord also has a $3200 security deposit from us. I have also heard that if the house gets foreclosed on that we would not be entitled to receiving our deposit back. I am wondering if it is legal for him to collect rent from us and not pay the mortgage?