This may sound silly but I'm looking for a book or guide that explains in a lot of detail  how most people go about buying a house .

Good luck explaining to your tenants that they have to wait a month for heat/cooling haha.I seem to be the exception though. 

Well explained.

You explained everything so succinctly and accurately.  

please forgive me if im out of line here, but it doesnt sound like you understand the implications this has in full.Ill try to explain and you can see if this makes sense. 

I wont fear it even though my profession is totally different . if anyone has done this, please explain the process . thank you.

Can anyone explain what on earth HUD has to do with anything if we’re not talking about HUD-1 paperwork?

Sit down with her, go through all the info you have on her and explain that in order to protect her and you that additional info is required, if any.

We explained that we wouldn't be able to hire her again without it.  

You'd need to work with an agent to identify pending short sales that are within 30-60 days of foreclosure sale and working with the listing agent to explain that it is an extra tool they can use to save their commission if the sale at the bank appears in trouble.