As many on this forum know, I was in this exact situation spring 09. I talked to a Jag first, and he reiterated what was said before, the lease is between you and the landlord, not the bank. You have no right to escrow your rent, you made an agreement to pay them the money, and they can toss you out if you don’t. I realize it doesn’t seem fair, as the bank is likely to toss you when he/she loses the place, but that’s a different battle.

I found what worked for me was after I found out what my rights were, (you may be able to break the lease if you can prove the place is delinquent, but that will necessitate a move on your part) I simply confronted the landlord with the facts. I worked out a deal where I was able to use my security deposit as the last 2 months rent, and they were cool with that. In all likelihood you’re going to have to move anyway, so this might be an option for you. Good luck whatever happens, I can tell you from personal experience what a frustrating/maddening situation this is.

By the way, I’ll never forget what my landlord said when I asked him if he was planning to walk away: “It go down!” (the value of the property of course)