Not only a blatant conflict of interest but also a big liability if the situation worsens and ends up in litigation.  

With supply and demand 101, we know that is not good, especially with the Saudis not lowering their oil production.From what I've read, I expect a lot of the outfits that are fracking in Canada and the Northern states to probably file bankruptcy and be sold out, or do tremendous amounts of volume to stay afloat, worsening conditions.

Making the loan seemed like a win-win, and I was newly divorced in the midst of a bad (and worsening) economy....To explain a bit more, becoming a private mortgage lender was not something I went looking for.

As the economy worsens, people trade-down and the demand for MHs increases

As the economy continues to worsen people are going to look for safer and more secure investments.

I've lived in Austin nearly half my life, and loved it, but the traffic and over-crowding has significantly decreased the quality of life in recent years, and I only see it continuing to worsen.    

There is no doubt that there are a massive amount of renters in the U.S. already, and I would propose that in the event of any economic worsening, it is reasonable to assume that will produce a greater percentage of renters to homeowners...

Short answer is It won’t be large enough of popular to leave a city so that it can impact housing price (to fall) and a particular area to raiseBesides the infrastructure that many talks about, there is the input and output of labor and skilled workers, Currently the market has C amount of jobs that are WFH-able, and let’s say that is 10,000 of Software engineers in this example, the current 10,000 of engineer can decide to move to less expensive area so to speak, but most of them will not, I will explain later, you see in order for the FB or google to continue to hire SE they need to have continuous input of student into the top schools, which are mostly in better areas so to speak, FB and google in this case won’t just hire anyone, so in order for less student to go to bigger cities where better education is offered, that city needs to have a better school, and public school doesn’t fund over night, so you get the idea, then for those who lives in say LA Bay Area, if they decided to move, they will need to move to an area where good education can be offered, and they won’t be there “cheaper in price” area that we are thinking about.LA has always see a shortage in housing and that will continue to get worsen, for those that moves to TX, it’s mainly being dragged by Companies moving to TX therefore the migration, of say FB decided to move to a smaller town out of no where then yes we can see that to follow, but just a WFH policy will not lead enough people to move, lastly is that no local government will incentivize enough to bring people in their cities, like what TX is doing, because simply if they haven’t they didn’t have the resource or not being able t offer incentive for the big companies to come in therefore bringing up RE and commercial Revenue stream, those that wanted to move, has a reason to move long time ago, could be cost of living has been pushing them out, or being closer to family, and now it just gave them one more reason to act on it, but WFH itself will not be a trend to get people moving.

This worsened until it caused me to chose to end the partnership.

Why would the borrower worsen his position by assigning collateral after the fact?