Daniel,My foreclosure attorney voiced the same concern about Safeguard. 

I asked my CPA if I should check with my mortgage company before transferring the deed, but they advised that I just do the transfer through an attorney and not explicitly inform the bank.A few attorneys I consulted also had mixed responses, saying it may or may not be an issue, and that many investors do it without problems.Instead of transferring the properties directly to the LLC, would it make more sense to:1. 

If the credit screening costs $25, then you earn nothing.I believe there are exceptions for a higher fee, but you have to stick to the actual cost of the screening.I would talk to an attorney before charging more than $25 per applicant.

We have a RE attorney & mortgage broker to make sure our operation is legal & compliant.

My attorney is drafting a contract.

@Ben Corby Your option 3 is not an option, if an attorney told you that, they obviously were not a tax sale/real estate attorney. 

Professionally, I'm an attorney admitted in NY, NJ and PA.

In fact, the title companies and attorneys I've dealt with during the foreclosure process were also surprised by their incompetence.

If an attorney needs to get involved i currently don't have one, can anyone recommend one in the Houston area if need be? 

DM me, and I will send you contacts for attorneys, lenders, and accountants they have previously used.