It was implied that we would likely get audited and they would not be able to defend that claim. 

But the equivalency of consolidating several TIC positions into one entity ownership position can be easily defended on business reasons.

A foreclosure process continues and the defendant rebuttals with dual-tracking complaints to CFPB or even in judicial defense.  

If it's the first foreclosing, and the second was named/served as a defendant, the 2nd gets wiped out.  

No one could give me a defendant answer, so I went to the sheriff’s auction and bid on the house we were already scheduled to purchase.

Well potentially you can do it, but I would say be prepared to spend a lot of time and effort and potentially money try to defend this action as the folks in San Francisco did. 

However, the judgement remains alive on the defendant for 20 years.

Back on point, if brokers take an average investor away from vinilla investments the likelyhood of them defending against suitable and appropriate is slim, I've had this discussion with several brokers and they avoid such issues.

Equity skimming shall be classified as a level II offense under chapter 9.94A RCW, and each act of equity skimming found beyond a reasonable doubt or admitted by the defendant upon a plea of guilty to be included in the pattern of equity skimming, shall be a separate current offense for the purpose of determining the sentence range for each current offense pursuant to RCW 9.94A.589(1)(a).Subsection 1(3)(a) can be broken down into the following elements.

A good indication will be whether the local authority that issued the block grant is named as a defendant in the foreclosure suit.