A couple of "simple" ways to help mitigate this problem is to make sure that you 1) find and buy a deal well below actual market value and 2) have ample cash reserves.

So you can only mitigate the 5 year at x amount.

They think they have correct information on the valuation of properties and can mitigate risk.

But of course that is just for US tax mitigation.  

Did anyone aware of this risk, if so how do you mitigate the risk?

Once your loan goes through loss mitigation and if there is no resolution then the bank will either foreclose or sell your loan in a very large pool to a hedge fund. 

I say that he had a duty to point out any issues (like when the water bill arrived) and the time so they could be investigated and/or mitigated.

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.

And sometimes it’s worth the risk and there are ways to mitigate that risk. 

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.