I live in ca June 20th 2010 we rented our house , a couple days later man showed up at the door taking pics and said that the house was in forcloser and it was suppose to be vacant , we called the landlord and she said not to worry she had made payment arrangements everything was fine , yesterday in the mail was a letter from the lender stateing that the house was in forcloser and that they would like to help her save it but they would have to hear back from her and that she had not contacted them this letter was dated July 17th 2010 should we be worried ? Do you think she is losing her home and we are going to be out money and having to find a new place to live ?

Yes. To both questions.

First, CA has a law that makes it illegal to not use the rental payments to pay the mortgage. There is a link to that law in a sticky note at the top of this forum about foreclosure issues. In fact, that sticky note has a lot of information that you should find helpful.

If the lender does foreclose, you will have 90 days to find a new place so you should have time. I'm not sure what money you think you would be out. You are paying for lodgings and getting those lodgings. If they do foreclose, you will probably not have to pay rent for the 90 days so that should cover your security deposit.

An owner can forestall the foreclosure right up to the time of the auction so, you really can't do anything but continue to make your payments until the property officially changes hands.