SBA lender (CIT Small Business Lending) entered bankruptcy protection in 2008 and are controlled by some sort of bankruptcy agency.

I can not tell you how many times I've been told an applicant has "pretty good credit," and then when I check it they have 8 trade lines in collections, prior bankruptcy, an eviction, and a 510 credit score.  

Hi Tim,I purchased a note in Cleveland where the homeowner has filed Chapter 7 Bankruptcy.

Even further to that regard, bankruptcy court will also tend to treat those contracts as secured as that seems to follow the intent of Congresses rules for distressed home owners.  

It may be in a bankruptcy or better yet have been in a bankruptcy and wind up with a relatively clear title.

He lost his job at the steel mill when it closed, filed bankruptcy and lost his house..

We have a bad mortgage, true, but I feel like we were fortunate enough to chose bankruptcy over foreclosure, just before the lines got really long.

Or maybe getting a pacer account to see if owner has been involved in a bankruptcy or not.

I would recommend presenting a solid case to the previous homeowners and definitely threaten bankruptcy.

So, that being said, she needs to realize that if she can't sell the home on the market (according to your figures there is no way.) she either considers bankruptcy, foreclosure, or letting you negotiate with her lenders to take a discount and then you purchase the home well under market value.