Where is the assistance for unemployed renters?

We lost our house to foreclosure of the item / JPMorgan. While in escrow account with a Short Sale Buyer, without warning, closed off and they took advantage of our buyer. Their message was simple: "Go ahead and sue us, we consider it to court until you go bankrupt." That was June 2009. Now the second mortgage is sending collectors after us. We want to own a house, but if we can not pay their inflated prices. They will drive us into bankruptcy. Are there any laws that assist us in California? Thank you for your time.