James Austin was stunned when a real estate agent showed up to snap photos of the house he was renting last year and casually informed him the place was in foreclosure.
Austin hastily found another house to rent in Bowie. But soon after he and his three teenage children settled in, that house went into foreclosure, too.
"Twice, can you believe it?" said Austin, 38, a consultant for a home-security firm. "This last landlord, he didn't even seem like the type who would do that to somebody. But what is the type?"
Thousands of unsuspecting renters who have been paying their rent on time are getting enmeshed in the foreclosure crisis that is plaguing the housing market.
In many cases, their landlords, often individual real estate investors, bought properties during the boom days, rented them out, then failed to keep up with their mortgages. The homes went into foreclosure, often unbeknownst to the tenants, who face disrupted lives and even homelessness.
Several localities around the country, as well as some members of Congress, are pushing to give renters more time before the new owners, usually banks, can evict them. Such a measure takes effect in Baltimore on Monday, and the District plans to launch television ads this month informing tenants of their rights.
"Early on, the focus was all on the homeowner's problems," said William C. Apgar, a senior fellow at Harvard University's Joint Center for Housing Studies. "It's only now that the renter's dilemma is bubbling up to the top."
Often, when a home is foreclosed on, lease agreements are dissolved. That means many renters can be forced to leave without much notice and typically without their deposits.
The Mortgage Bankers Association, which tracks foreclosures, does not know how many tenants have been uprooted this way. But one in five foreclosures initiated in the third quarter last year were not occupied by the properties' owners, the group said. Some of those nearly 70,000 properties may have been vacation homes. Others may have been vacant. But a large chunk were probably rentals, and as the foreclosure rate has climbed this year, those numbers have probably climbed.
How renters fare in these situations depends on where they live.
The District has some of the nation's strongest tenant protection laws. D.C. renters can stay put after a house is foreclosed on, said Julie Becker, a senior staff lawyer at the District's Legal Aid Society.
The tenant would then pay rent to the bank until the bank sells the home. If a new owner wants to move in, it's up to him or her to evict the renter, Becker said. If the owner does not move in, the tenant has the right to stay.
"But a lot of renters don't know that," Becker said. "They get a notice in the mail, usually addressed to the owner, saying they have to move out within 30 days, and they just pack up and leave."
The Office of the Tenant Advocate, an independent city agency, now receives 10 to 12 calls a week from panicked renters, said Lennie Mitchell, the agency's spokesman. Next week, the agency plans to post a form on its Web site that tenants can send to the banks informing them of D.C. laws. It plans to follow up with a marketing blitz that includes public-service TV ads.
Virginia and Maryland laws are less renter-friendly, basically leaving tenants at the mercy of the new owners once a foreclosure is final.
In Virginia, that can take up to two months as the lenders and courts deal with paperwork, said Kristi Cahoon, a lawyer at Legal Services of Northern Virginia. Until then, tenants often live rent-free.
"We advise clients to save money during that time for a security deposit and first month's rent while they look for another place to live," Cahoon said. If the lender is pressing the tenants to leave, renters could consider a "cash for keys" arrangement, in which the bank pays the renters to move.
There are laws protecting deposits, but not all landlords follow them. Tenants could sue for damages, but that only helps if the landlord has money.
LaToya Hall knew none of this when she and her cousin left the Manassas townhouse they rented.
Earlier this summer, the two received a mailed notice, addressed to their landlord, with the word "foreclosure" stamped on it in red letters. They called the landlord repeatedly but he did not respond. "Still, we kept thinking that as long as we paid him the rent, we would be all right," said Hall, 25.
She was not alarmed until two weeks later, when a sheriff tacked an eviction notice on their door. Three weeks later, she and her cousin lost hope that they would get their $1,200 deposit back.
They left. The two parted ways.
Without her cousin, Hall had no reliable ride to work, and she lost her job as a hair stylist. Without her deposit money, she could not afford to rent again. Her options ran out.
She now lives in a homeless shelter in Manassas. She is nearly six months pregnant, and she's searching for a job.
Because of cases like Hall's, the U.S. House passed a measure last year that would require the new owner of a foreclosure to inform renters at least 90 days before an eviction. If there are more than 90 days left in the lease, the renter could stay for up to six months.
Some jurisdictions are finding their own remedies, including Baltimore. Starting Monday, tenants in foreclosed-on homes must get at least 14 days notice -- by certified mail and first-class mail -- before eviction.
A week before the eviction, the sheriff's office must post a written notice on the door. "It's a good first step, but two weeks is not enough time to find a new place to live when the affordable rental market is tight," said Sally Scott, co-chairman of the Baltimore Homeownership Preservation Coalition.
That's as good as it gets for tenants in Maryland, said Kathleen S. Skullney, a foreclosure lawyer at the Legal Aid Bureau in Baltimore. In limited circumstances, a lease may survive a foreclosure, but otherwise, the new owners are not obligated to contact renters in advance. Many limit their efforts to dealing with borrowers and courts.
Once the foreclosure is approved and eviction is legally allowed, the renter may have to leave on the spot.
"The renter has no defense at that point," Skullney said. "If there ever was an overlooked and uncontemplated consequence of the foreclosure crisis, this is it."
Having been through this twice, Austin understands that all too well. He's looking for another rental, and hopes he won't land up on the street first. He sent a letter to the lender that repossessed the Bowie house, asking to stay a while, he said. "I've gotten no response."