(3) You have an ejectment order from a judge.

The attorney says that was a wrongful foreclosure and they will fight it with the bank which foreclosed.Meanwhile, I am trying to serve the lady ejectment suit papers.She will not open the door nor will respond to phone calls - does everything to avoid the process server.What are my options in this case ?

Read my posts about lawful peaceable possession of abandoned property vs. unlawful possession of vacant and neglected property to understand why that rarely works out like planned.You remove occupants by an ejectment lawsuit filed in Circuit Court, not an eviction. 

If you friend is an official tenant of the home that the issue is occurring in, and there is no landlord tenant relationship between the brother and her or the brother and the mother removal of the brother would be an ejectment. 

Now, should Buyer1 default; the investor on title, is in theory, supposed to only have to eject (ie evict) to regain possession.

But yes, it would certainly lend itself to being perhaps predatory. it could be like Do hard money were they don't actually loan they form a LLC together with the borrower and if the borrower does not follow the rules of the operating agreement they just eject them from the operating agreement and take over. also in our state ground up construction loans are exempt from licensing  rehabs are not.. not sure about ground up for those that are owner builder and going to occupy though will have to look into that. 

When asking for a taxpayer to be served in an ejectement (Jefferson County), is one method of service (certified mail or sheriff) better than another?

In PA, an ejectment and quiet title would be the approach taken.Regardless, you seem to have two separate things going on here.First, getting the occupants "out" - or gaining possession.

If you can hit the escape hatch button, eject from this deal immediately.There are deals out there with much better numbers and much less risk.Your cash flows relative to your purchase price are marginal at best.

Those who lost a home to foreclosure think that they have fewer options - and if you consider accepting them, you should play that up; if you had to evict them, then the pool of landlords who would accept them would diminish.I agree with MikeOH on the point of only taking them if they left voluntarily from the foreclosed home, and avoiding them if they were evicted/ejected.