This can increase cash flow to allow the business to pay off debt or invest in other areas of operations.

After the auction, the bank is owed the amount it bid at the sale which typically equals the total debt or the value of the property, whichever is less.

I wonder if accepting a partial payment would make them a debtor and allow for legal protection?????

Some percent maybe 5% will be motivated and need to get rid of their houses.You must find out the balance on the mortgage (and all other debt or liens on the house), the monthly mortgage payment. 

It means (assuming they were properly filed and perfected) those are liens (a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation) against the property - they should be paid by seller prior to or at closing.

Unless she isn't reporting income that is impressive to be floating life with 20% of your income while rest going debt, or the numbers are wrong.I would dive more into it and see what you can do, but if her debt really is 80% of her income I don't think adding more debt is a good idea, but each to their own.

It may make sense for many investors to transition to simply invest in bonds/debt (and earn simple interest in the 6-7%+ range) or to purchase property with no debt, or as little as possible, and pay it off quickly.

Rescission occurs for several reasons, including technicalities with the foreclosure process, debtor paid prior to foreclosure, probate is pending on at least one of the property owners or borrower of the note, or property owner has a bankruptcy pending with an automatic stay prior to sale.

When calculating DTI would we look at the schedule E to figure income and then add the monthly note to my debt or would that property be looked at separately (as long as 75% of rent covers the note it's a wash)? 

-do you have a lot of other debt, or just the student loans?