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Unfortunately yes, he can hold you liable for any unpaid rent under a breach of contract suit. The situation between the seller and his lenders doesn't affect your contractual duty to pay rent as long as you are living there. So whether he was paying the mortgage or pocketing it, it isn't legally relevant to your contract as a tenant with the landlord.
The statute of limitations for a breach of oral contract is 2 years in CA, 4 for a written contract. So to be very honest if you didn't pay the rent, if he sued, he will win.
I am very sorry that I don’t have better news, but please understand that I do have an ethical and professional obligation to provide customers with legally correct answers based on my knowledge and experience, even when I know the answer doesn’t make the customer happy...