Many trusts have substitution provisions and other specific clauses to deal with default.

Rate, term, payment, skipping payments, early pay off discounts, right to substitute, right to subordinate and other aspects.In any negotiation you have to recognize when you are losing the other side.

I've done it, use a 1099, or "substitute 1099".

In return, ask the agent for comps for properties you're interested in.That said, there's no substitute for getting to know an area.

I don't know what they call preforeclosures (lis pendens or substitute of trustee), but when I was looking for them I went down to the parish court house and asked for a list of preforeclosures.

Collateral substitution rights?

That isn't to say, however, that the listing price IS the value; if you think it is listed high and has been on the market for quite some time, or you think it is low and just went on the market, the listing price can help confirm your valuation (as opposed to being a substitute for it).

Include a little statement that says, this is not an insurance policy to substitute the borrowers requirement and the borrower is not a beneficiary of said policy.

You can be relegated back to purchase price as substituted value (75% of purchase price instead of 75% of appraised value).  

So don't look at it as a substitute for good insurance or fair and legal business practices.With an LLC, you can file taxes as an S-Corp, as long as you make the designation ahead of time, by March 15th I believe.