With the landlord tenant foreclosure laws tenants are protected.
For instance I sign a 1 year lease with a landlord.1 month in I get a notice in the mail the property is being foreclosed in 4 weeks at the steps.
The landlord I made the lease with for the house took the deposit money and rent and ran.The bank didn't know the landlord no longer lived in the property which is why the notice was mailed to the address the tenants were living in.
The bank forecloses and 10 months are left on the lease.Can the bank evict the tenants?? NO THEY CANNOT.
The bank has to honor the lease.Now if they were month to month that is a different scenario where the tenant has a certain amount of time to vacate the property.
If a tenant gets foreclosed on often times they do not know where to make the payments to.The tenant needs to set up a separate bank account and make the payment there every month.Then when the tenants and the bank go to court the tenants can show they have an enforceable lease and they were making payments each month the bank just didn't communicate to them where to send it.The judge will make the bank honor the lease because of the tenant foreclosure protection laws.
As far as right of redemption investors buying in pre-foreclosure in a post redemption state will pay a distressed seller money to sign away their redemption rights.
Some banks will want to dump a property with a tenant in place as they can't get rid of them by law and have to wait it out.If you as a buyer are willing to take the risk on the price should reflect that extra risk.
If the bank wants to dump a dog of a property it will cost them.Only an unsavvy investor would pay top price and be stuck with a holdover tenant.