One in nine mortgages is delinquent or in foreclosure, according to the Mortgage Bankers Association. In the fourth quarter 2008, the MBA reports, 7.9% of one-to-four family mortgages were delinquent, another 3.3% were in foreclosure and the share of new mortgages going into foreclosure remained at a record high of 1.1%.

Without Just Cause, a study released earlier this year by the National Low Income Housing Coalition (NLIHC) and the National Law Center on Homelessness & Poverty (NLCHP), found:

• Only 33% of states--17 states--require any type of notice to tenants;
• Only 29% of states--14 and DC--require a judicial process for foreclosure;

• In several states--e.g. FL, IO, WI, NY, OH--tenants may remain only if they are not named in the foreclosure proceeding;
• Only 2% of states--NJ and DC--explicitly preserve tenants' rights in the lease after foreclosure;
• Only 23 states provide exceptions that may preserve tenants' rights. In Connecticut, for example, tenants who are elderly, disabled, or receive federal housing subsidies are protected and their tenancies preserved. And in Illinois, if tenants are not named in the foreclosure proceedings, they can maintain their lease, subject to the filing of a "supplemental petition" by the lender.

"The simple filing of the foreclosure lawsuit does not mean the lease is ended," Heist and Weisse state. "The owner still fully owns the property until it is sold at a foreclosure sale. Both the landlord and the tenant remain obligated to perform the lease. The lease will stay in effect until a foreclosure judgment is entered by a judge and the sale occurs. That can be two months after the tenant received the foreclosure lawsuit or two years. There is absolutely no way of knowing how long it will take."

At least that's the way it works in most locations. According to author and attorney Janet Portman, a lease ends in most states if a mortgage recorded before the lease was signed ends in foreclosure.

But Portman, who specializes in residential and commercial landlord/tenant law, said there are a few exceptions to the rule. "In rent control cities with just cause eviction protection, and in Washington, DC, New Jersey, and New Hampshire, tenants who arrived after the mortgage was signed may keep their leases," she says. "And even if the lease or rental agreement is wiped out, the new owner of the property must still follow state eviction procedures in order to remove a tenant from the rental unit."