c) If it is the latter, her rental agreement is now (m-to-m) given her 2 years of residency, Will she only have a month to get out? Can she talk with the bankruptcy trustee and try and stay.
Because the primary lender on the property is in first order of succession for recovery of funds. She is down on the bottom. She should take the approach with the lender that having her as a tenant means that the property would be taken care of and there is significant less chance of vandalism while the bank goes through the foreclosure process. She should also bring up that this now puts her in a position where she may need to look for a new place on short order, so a rent reduction may be in order.
You may want to get both lenders and owner in the same room and determine who the rent payments go to. With the landlord in default, I don’t think the banks would like continuing funds to be directed to the landlord.
