The bank makes like they are going to do something, but, if they show all their non-performing loans that are on the books, they would have to declare bankruptcy or their stock value would plummet.

If I declare investment as such my rate  is 4.5%If I declare the investment as a primary residence my rate is 3.8%.

Here is the thread on insolvency:http://www.biggerpockets.com/forums/94/topics/45667-declaring-insolvency-to-irs

Guy thinks, okay, and wishes for a million bucks, and bingo, the genie produces a deposit slip for his checking account in the amount of a million bucks, and then declares "and two million for every lawyer on earth."

., pay taxes on $176K of income you didn't actually get), declare bankruptcy of some combination.

In my state we even declare with the state our intent to "homestead" the property. 

I think Torok does address the lender's right to call the note (albeit in a roundabout way) when he refers to the "contract provision, which allows the lender, at its option, to declare the loan due and payable if the real property is sold without the lender's prior written consent."

Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

He declared bankruptcy about a year ago and the deal with the bank was to have the rental home rented or they would reposes it. 

Make certain you read thoroughly through your HOA declarations.