I also work in Manhattan so ideally finding a MF in Hoboken/Edgewater/Weehawken would allow me to declare primary residence and get the mortgage tax benefits.

You would also have to declare this income in your US tax returns, although you would get a credit for the tax already paid as per the double taxation treaties. 

Antidotally, I can say that any newly declared wholesalers I have encountered in the Maritimes in the past 3-4 years have faded away.

To fail to declare the loan and to claim that the cash is your cash would be mortgage fraud.

ISTM a MAJOR portion of the inner city was declared a Superfund site over this issue.

We could even withold disbursements or better yet, declare a cash need and ask the judgement holder to put money into our trust!!!

An Attorney can have a Mortgage Document Analysis produced and that could yield some potentially very intriguing results showing such things as Robo-Signing, Back-Dated assignments of the Deed of Trust, Potential issues with The Declaration of Compliance.

In 4 years they could've declared bankruptcy and had a fresh start.

I've worked with a couple of brokers in NYC and they're typically licensed, HOWEVER, if you're just a private citizen and putting together a private deal, the only thing I can think of having to do is declaring your income on your taxes when it's time. 

(What are your KPI's or key performance indicators)5) What happens if one of you dies, is disabled, has to declare bankruptcy, commits a felony, gets married?