Not only that, but lending to the poor also became a qualification for take overs and mergers, if you had not lent enough to the poor, then a take over would be blocked.So in one stroke, ability to repay took second place to other things.Mortgages were then made, packaged up into so called bonds and sold to investors (not re investors, but people like pensions companies etc).In 2006 a lot of these packaged mortgages were found to have deficiencies, eg people not repaying, and the investors holding these investments started disposing of them.Banks were asking accountancy firms in the City of London and Wall Street to start unpacking each one of these instruments to redo e paperwork and pull out the bad loans and then repackage them.The Banks were offering in London £50,000 to redo one of these bonds (for a better word) and offer insurance on the bond after it was repackaged, the auditing and accountancy firms asked for £250,000 per bond and no insurance. 

In addition to both of you paying off the existing mortgage, friend needs to negotiate a payoff and release of the deficiency judgment lien.

If you have any sort of catastrophic event in the property and you get a notice that the you have x amount of days to correct the deficiency prior to the HAP payment (section 8 payment) being stopped for non compliance, make sure you as the owner/agent are the one that is there to meet the inspector for the inspection, do not rely on the tenant because they will ALWAYS LET YOU DOWN...

If you are deficient as a borrower, then they will not finance your deal.

If not, what deficiencies were identified.  

Also its important to note.. that during the GFC the US govmit put a moratorium on banks filing deficiency judgements against borrowers.

However in other areas (like FL) it is very specific in the LL/tenant law that partial payments do not stop any eviction proceedings unless the deficiency is fully cured. 

Being out of pocket each month because of rental income deficiency, instead of paying rent, isn't the worst thing in the world though - because you have live SOMEWHERE, right? 

Plus forgive the deficiency judgement.

Basically, the County should never have sold a lien which was subject to appeal, the tax debtor should not have had to defend their interest in the property, since they were in the right on the underlying tax issue, and Vesta shouldn't have had to incur legal costs to fight for a lien which was issued based on an invalid tax deficiency.