Erin Kennedy was 10 months into a one-year lease on a home in Richmond's Marina Bay development when she found a notice on her door saying the home was being foreclosed.

She said she called her landlord, who told her that he was trying to refinance the house and to keep paying him rent.

"I was paying the rent, but he was not paying the mortgage," Kennedy said.

Soon after, the house went into foreclosure and Kennedy immediately heard from a law firm representing Freddie Mac, the federal real estate lending agency that held the note on the home.

"I had to decide whether I still wanted to be living there while they were showing it (to potential buyers)," she said.

Kennedy's situation reflects a problem that tenants rights' groups say has been flying under the radar since the home foreclosure crisis began in 2008.

They say thousands of renters have lost security deposits, paid rent to former landlords who no longer owned the house, and agreed to move on short notice because they didn't know their rights.

Kennedy accepted a cash settlement to move three weeks after the foreclosure in November 2009. She received the check the day she moved out but struggled to come up with the security deposit for a new rental in El Cerrito.

The landlord still owed her a $3,200 security deposit and has been paying it back in $100 and $200 installments, she said.

"I jumped at the first place I could find," she said. "I'm hoping this place isn't shaky, too."

Kennedy's former landlord said the home had been foreclosed but that he had paid back the security deposit in full. He did not want to be named because of privacy concerns.

According to the rights group Tenants Together, 77,145 California rental units went through foreclosure in 2009, affecting 208,795 residents.

Some of the situations probably have been resolved to everyone's satisfaction, said Gabe Treves, program coordinator with Tenants Together, which is based in San Francisco.

But Treves said his agency has helped 3,000 renters squeezed between landlords who are behind on their mortgage payments and lenders trying to recover their investments.

"The vast majority of the tenants we talk to are having their rights violated," Treves said. "Banks are being very aggressive in trying to get the tenants out, because they are stuck on the idea that if tenants vacate the home that they can sell it."

Wells Fargo Bank is committed to following all rules that protect tenants who are living in foreclosures, spokesman Jason Menke said.

At the same time, Wells Fargo is in the business of lending money for home purchases, not in managing rentals, he said.

"Generally, it's our object to get a new owner into the house as quickly as possible," Menke said. "It's in our best interest and that of the community to return properties to the market."

State Attorney General Jerry Brown launched an investigation into the issue last month, partly in response to the Tenants Together report.

Brown sent a letter in June to California banks, lenders, investors and law firms asking them to explain their procedures for dealing with tenants in foreclosed properties in an effort to find out whether laws are being broken.

Tenants are protected by a 2009 federal law that allows them to stay in their units for 90 days after a foreclosure notice is posted, but they have other rights as well: