What happens to my security deposit after a foreclosure?

The security deposit remains with the prior owner and the bank/investor that acquired the property is not obligated to refund the security deposit. Often times the lender/investor will offer a cash-for-keys incentive for you to be out by a certain date. Even if you accept the cash-for-keys, you can still pursue the collection of your security deposit through small claims court from your prior landlord. Keep in mind that if you stopped making rent payments prior to the foreclosure sale, the landlord can apply the security deposit toward the unpaid rent.