Are you in a situation where the house that you are currently renting has recently been foreclosed on? If so, you may be a bit confused about what to do. Your first step is to find out how far along in the process the house is so you have a time frame to work with.

If the home is still owned by the owner of the home, continue to pay the rent to the landlord. In case your landlord is able to prevent the home from foreclosing, you will have to honor your contract with them. If you decide not to pay rent, the usual contractual rules apply and you could receive an eviction notice or be sued for the rent owed.

After the property has been sold via an REO auction or a short sale, it will be in the hands of the new owner who might be happy to continue renting the place to you.

It is common for a state to have a regulation in place that grants you a redemption period of one year or less. Your rental can continue over this period unless the new owner decides to take back possession.

Depending on local state laws, if there is a new owner, some states only have to give 30 days notice of eviction before taking possession of the property. Under a foreclosure, all leases are considered null and void. There is only a very small amount of cases where the new owner has been forced to let the lease expire before the eviction.

If your budget allows, you can even offer to purchase the home from the owner. It is better for them in the long run to sell through a short sale even for less than what the house is worth, than have it foreclosed. Lenders may be willing to agree to this as they will still get partial payment for their loan and you might get a good deal as well.

You may also be offered "a keys for cash offer", whereby the bank will pay you to vacate the home early and may also provide assistance in your move.

With a place that only has a short notice period, it is wise to plan ahead and have a new place ready to go.