Are both a Promissory Note as well as a Deed of Trust needed for a small private loan (~10% of single-family house cost)?  I've gotten two "yes" and two "no" responses regarding the need for a Deed of Trust.  All four...

Normally, some of those risks are mitigated with local knowledge.

My last four houses have been in flood zones and it had no effect on the sale of the properties.If you think I am on a coast somewhere the properties were actually in the desert  of Palm Springs, Indio area, The flood zones were classified as once in a 100 year flood zone, Also to mitigate the insurance requirements you just have to submit a elevation report some on file with county some had to pay for. 

Some States require that to be professionally mitigated and if not, You can be held liable for years after you sell it if not done properly- Plus you will have to disclose you had mold and how you mitigated it.My humble opinion- Walk away with the spread you are currently getting.

This is a completely unknown scenario to me and I am wondering if anyone can give me advice on what to consider, request, research, advantages, disadvantages, risks, risk mitigation, required/recommended paperwork, etc.Thanks!

What are you doing as an investor to mitigate this risk? 

With more advanced servicing technology systems, non-bank servicers may also be better able to offer loss mitigation alternatives to troubled borrowers.

What loss mitigation effort has the bank made?

Best to consult an accountant with cross border real estate and business expertise to get a full understanding of how you should hold (own) any Canadian properties to best fit your situation and mitigate tax liabilities.DispositionAs a non-resident, when you sell a property, you must notify the Canadian Revenue Agency (CRA) pretty much immediately (something like 7-10 days if memory serves) to obtain a certificate of compliance.  

., and yes you have legal recourse to mitigate these issues but that doesn't necessarily mean the financial means will be available to cure whatever the issues are that may arise.My suggestion would be to seriously consider an acquisition of this magnitude where you acquire fee simple title.