I've started back with REI in earnest for just the past couple of weeks (leaving the combat zone soon).

Please send me a Western Union money order for the $4K difference right away as I need it to cover my moving expenses".A week or so later and that $28K check turns out to be fraudulent.

The risk or a combative board and their ability to fine you into oblivion worries me, any thoughts?? 

In my opinion the last down turn was easy to see Then again I live in FL and have friends in Miami which was, if not the epicenter, then at least close to the center of the cause of the crashTens of people from Miami and Tampa went to jail for fraud for literally tens of millions of fraudulent loansIn my experience the mortgage companies and banks are now much more rigorous in their researching mortgage applicants.

How would you combat this?

What I am really concerned about, are the tax implications and a change of deed would trigger, I am trying to find out what this would mean, how it would effect both parties in the transaction, and anyways to combat it/deal with it.

And since our housing prices are lower then it doesn't necessitate a lot of multifamily unit properties to combat the high cost of living.  

Attorneys love chasing people who own property in their personal names because it's an easy case and a quick settlement - but if you can add protections and anonymity you are really combating their bottom line. 

Anyway, the reason I wanted to ask was because I didn't think a bank employee would suggest something fraudulent but his solution did not sound right to me.Refinancing my first house with a conventional loan as an investment property is not something I had thought of, I will definitely be looking into that.

They may let a seller suffer less who carried back a second.Assuming there is an agreement for the second to cut the debt, restructuring it later, dealing fraudulently with a lender to influence them in taking a loss won't be something you want to do.