The only time we make exceptions is if the adult is disabled and incapable of living independently or elderly and being cared for by a relative.

I just bought a two flat with a similar situation except they have 10 animals . 

really depends on the state.. for instance OHIO is one of the safest the judge wont confirm the sale unless everything except irs is taken care of.. you just need to know if its a first or second.NV is another pretty easy one at least Vegas. where the sales are handle downtown there is a title company right there and they run title on everything that is going and offer a hand out to any bidders just ask for it..

- except for the rent controlled cities ie. avoid Oakland and SF!

Mechanics liens are recorded EXCEPT that they have 6 months to file, that's the gotcha. 

I have called 20 banks and no one does a 1st lien on investment properties except 1 stated they would if owner occupied.During the research I read a website, which stated that 1st lien HELOCS on non-occupied are illegal and not allowed by Federal Law.Anyone know if this is true?

That's another thing.... there IS no signatures on the listing agreements except ours which would seem then it is not even a valid contract.

Explain that you have company policies which you follow and never deviate from, no exceptions, no apologies.

@Scott Trench expressed a lot of my sentiments except for one major one.  

I'm not saying you actually violated any laws or committed any human rights violations, but this is exactly why it's vital to have an objective, documented screening process and publish your criteria on every advertisement for the property that you put out there.