What About Rental Properties?

Calculated Risk carried a story today about a woman of modest means who had bought a 2nd property as an investment -- I assume she used it as a rental. (The woman was originally interviewed on PBS). Now, she's having a hard time paying two mortgages and would like the government to bail her out. Remember back two or three years ago when everybody was encouraged to buy rental property? And many, many people did who had never been landlords before? Remember we were all told "Don't worry if the rents don't cover the mortgage. Your long-term gain in value from the equity will more than make up for any shortfall you're experiencing now." I was dubious at the time and now I'm worried. Here's my question: what's going to happen to the tenants in those properties if and when the owner defaults on a mortgage? How will the properties be maintained? What happens to tenants when their building is foreclosed?