The odds of you buying the house at fair market value now, are slim to none. If you have cash, you can maybe pick it up at auction… a long shot.
The most prudent move for you is to look for a better rental deal while time is on your side. When you find it, give your thirty day notice on your current place and state: that because the house is in foreclosure you will use your deposit as last months rent etc.
If you can afford to buy the house now, why would you want to pay fair market value for it? You could probably buy a nicer house in the neighborhood for less than fair market value.
The landlord is not rent skimming. He legally owns it until he is foreclosed on at the courthouse. There are landlords in San Diego that have multiple properties in foreclosure that are doing the same thing. My former landlord is one of them. Bad Karma… YES! Illegal… no.
