I feel bad but I will be denying her based on credit report.However, I’m wondering if I’m being too unsympathetic and if there are ways I could be more compassionate and help her out.

I can't even advertise a vacant apartment on facebook because the masses bombard my post with complaints about evil Landlords or how this town used to be compassionate. 

I am very compassionate, but sometimes Ihave to lay down the law.

If you want to be compassionate assume you will have to go through a complete eviction, determine what that would cost and offer them that full amount.

There are longer version examples available from some of the yellow letter companies, but I don't think you need to go into too many details on why you are mailing them, or being compassionate for their loss(that should come during the phone call if they tell you why they are interested in selling).If they are truly motivated they will contact you from a relatively basic letter, and that may be a better way to approach someone in this situation than an email or phone call if they are still grieving.

Thank God you are not in their shoes and be as compassionate as you can. 

The lender is not your partner and they are not passionate, enthusiastic, or compassionate.

Through all of it, I'm glad to have always done business in a strict manner, without exceptions for anybody, but at the same time being a compassionate individual who helps my tenants in other ways.I've had to evict a whole family for numerous violations. 

You can be compassionate and sympathetic without agreeing to pay for things that are not your responsibility.Your insurance will likely coverage damage to the property but it is up to the tenant to have renter’s insurance.

This may seem harsh judging by several folks comments on here but I think it is really the most compassionate path.