The BS discrimination claims (you won't rent to felons, and blacks are more likely to be felons, therefore you're a racist) will go away. 

As long as you're filing jointly, both meeting the 2 yr use test, and either meeting the ownership test, then the full $500k can be claimed. 

They claim they raise all the capital but are unable to do so. 

It slows down the unethical operator.But it is rarely actually mortgage fraud, which is typically related to the paperwork filled out and documentation provided to originate the loan.Since someone buying on SubTo rarely signs paperwork with the original lender, he isn't telling the lender a lie and therefore making a claim of mortgage fraud against the buyer is difficult to make stick.

Valuation rich but equity poor. we looked at one portfolio recently that claimed to have $15M and $11M in loans but the issue was the $15M valuation was based on 90%+ occupancy and not one building was at 90% so they were at 100% LTV essentially. 

They won't be able to fix that problem as there is probably a small leak in a pipe or a crack in the foundation or a bit of water coming in from somewhere or moisture building up in the home.I also agree with Nathan about taking the first contractor to small claims court.

@Izraul Hidashi I’m not claiming to know how the entire banking system works but I feel that I have a pretty good idea.

She is a truck driver and had always claimed she is on the road and can't talk.

Simply gifting him half the property now wouldn’t immediately allow him to claim the exclusion without fulfilling this residency requirement, I don't believe.One thought would be to use a HELOC to pull just enough equity out of the current home and use it to buy a smaller home, or at least the down payment.

And people who claim $0 investment must not have an electric bill like mine was.