Once they fill it out you get a background check, income estimate & credit check with every delinquency or bankruptcy, criminal history, sexual predator check, and also an eviction check. 

Have you ever operated under a different name, declared bankruptcy, been sued or sued anyone before?

They offer statewide eviction, nationwide criminal bankruptcies, liens and judgements, U.S. sex offender, FBI/US Marshals lists, terrorist search/OFAC for all renters with or without a social.

TItle companies check for deaths, divorces, bankruptcies, judegments etc. before insuring title.

So if the note hasn’t been paid in say two  years ( perhaps the borrower filed bankruptcy, demanded mediation, entered into a number of modification agreements he didn’t adhere to, or just rode the Covid “foreclosure holiday”, it is possible the borrower hasn’t made a payment in 2 1/2 years.  

If the investment has professional administration, you will have access to the answers to those questions, but also much deeper vetting of the sponsor that will include personal background checks covering things like bankruptcy, judgements, litigation, criminal history, and other red flags related to a sponsor that you would want to avoid, plus other items that investors rarely consider like ensuring that the properties are actually titled correctly.

Multiple hazard insurance companies have filed bankruptcy recently. 

Only fear is the owner may file bankruptcy since he owes the town all kinds of $$ too..

Even if you sue him he'll probably end up declaring bankruptcy and you won't see any of your money back. first thing you should do is find out if your state has a department of consumer affairs and report him there.

I have been informed that criminal charges and court ordered restitution are not removed in bankruptcy and that people have been incarcerated for these types of offenses.