Over the years the side toward the house has slumped toward the house and during very heavy rains can cause seepage into the basement. 

How does this harm a lender. 

Next thing they know one LO tenant after another defaults and it does not take many to cause their world to go upside down.. when you figure the underlying payment was about 1k or so.. next thing you know 6 or 7 non pays and they have Zero or negative cash flow dont have the money to try to unwind the LO as those people figured they had equity and would not move..

It defaults to same day, but I could see how this could cause some issues.

I believe you still have go through a quiet title process in SC and I know this has caused problems for other investors in obtaining clear title and title insurance in future sales.

Ithaca council to consider “good-cause” eviction law - The Ithaca Voice

If only one tenant has insurance and there's an accident caused by another tenant's negligence, things can get messy.

CPI coming in above estimates generally means that mortgage rates will rise (as this will cause the Federal Reserve to lean toward higher interest rates to fight inflation that’s greater than expected) and vice versa (lower than expected would cause mortgage rates to fall).

The person you sold to would probably have a cause for legal action.However, in Austin, @T.

All of these trends are positive on a local level, the cause it tough for sure, but these small towns are benefiting.