My landlord's mortgage foreclosed last week. The property went to auction today, 4/18/07, and no one bought it, so the bank now owns the property. We paid rent to our landlord for 4/1/07. We were tenants at will, so there was no lease. She has our last month's rent, which we were looking to apply for May rent and move out. I don't expect she will give us our money back. What usually happens? Does the bank collect rent? I now think moving at the end of May is not very good because it may not make sense for me to sign a lease until as late as August 1, so it'd be best to stay through most of the summer, if possible. Any suggestions/ideas?

Yes, as of the 18th, the bank is now your landlord. They do not because it was a foreclosure honor any agreement you had before, even if it was a written lease.

The past landlord will owe you the deposit back now, since your rental with them ended today. ( but she just got foreclosed, so odds are she has no money to pay you) So you may as well write that off.

You can not legally apply it to may rent, since the bank does not have it. So you will owe them the rent.

Also the bank can merely demand you move also, since you have no agreement with them, the amount of notice they have to give will vary by state law, they most likely will give you a 30 day notice

I doubt they let you stay, most likely they will want you out, so they can get it really to sell.