@Aaron Vaughn,Yeah - doing real estate is easier when you know how than when you have to trail-and-error it and hope you don't land yourself in bankruptcy, jail or both when you stumble.

Also the lender will do background checks on your group so you need to have a frank conversation with them upfront to see if they have any felony, bankruptcy or other things that could pop up in the underwriting process.

But for future purchases, or no-cash-out refinances, you can use this program.As far as underwriting:Purchase : 25% down payment is required for 1-unit; 30 percent is required for 2-4 unitsRefinance (no-cash-out only): 30% equity is required for all property types (1-, 2-, 3-, or 4-unit)Minimum credit score must be 720There must not be any mortgage lates within the prior 12 months on any mortgageThere must be no bankruptcies or foreclosures in the prior 7 yearsThere must be 6 months of PITI reserves on each of the financed propertiesWhen they count up "financed properties" for this purpose, they also count financed properties held in an LLC of which you are a member.You can also use the Delayed Financing Exception program for properties 5-10.

But at the end of the day, she's the one thats paying for your sins.If you're doing a short sale, why not just go all the way and declare bankruptcy and leave your mom's house out of it completely?

@Jared HohenseeSometimes it is best to leave it in a 401k from a bankruptcy protection perspective.

Now that I understand you are a Realtor, held to a higher standard, I won't come in with guns blazing :)You need to take buyers to get them qualified, what you find out is what they must do to meet guidelines in 2 years or 3, the worse the credit is, the longer the contract needs to be to cure the issues.I'd think again if I were you, I wouldn't get in pig in the poke, I'd want near misses, those with slight issues, foreclosures are fine, depends on why they had a foreclosure or bankruptcy folks from 2 years ago.

One of them had been sued years ago (not related to real estate) and lost all of his properties and eventually filed bankruptcy.

If you pay too much, if you get wiped in bankruptcy, if you let tax sales go through, HOAs in some states, incomplete collateral that prevents you from completing the foreclosure..There are multiple ways to lose but most of the above can be detected in the due diligence or fixed after your purchase.

This empty hat management company will just be in place to further secure the trust, where if a claim is ever filed where damages exceed it's insurance policy, this company can file bankruptcy. 

Yet, it takes only 2 years to bounce back from a short sale or foreclosure, or bankruptcy and you can get another mortgage.