CA landlord tenant law, what does a renter do if the place he is renting is foreclose on

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You need to read your rental agreement and see if there is any language governing this situation. I would certainly hold on to the money; I don't think you necessarily need to open an escrow account, just be sure that when you receive notice from the new owner you are ready, willing and able to pay the rent then due. It would be highly unusual and unlikely that you will not soon hear from the bank. Be sure to make sure the notice you do receive gives you adequate assurances that the bank is entitled to your rent before paying it.

The California State Bar provides a wonderful public resource for tenants and I have posted the link. It might contain more useful information. You may also want to consult with an CA lawyer. You can find Imperial Valley area lawyers on Avvo (some of whom offer free consultations), or use a local Lawyer Referral Service: East San Diego County LRS
El Cajon, CA, Phone: 619-588-1936. If you cannot afford the referral service, a link to a low income a low income alternative is provided. Good luck.