Then you can apply the deposit to any damages when they leave and the remainder (if any) can be applied to the judgement. 

However, I am not sure how this correlates to the legal judgement. 

What about tax liens, mechanics liens, judgement liens? 

Of course you can sue and you will probably win, but after you consider attorney fees, court costs, your time away from your business, etc and the real possibility you will never collect on a judgement.... is it worth it? 

Does the property go to the Judgement lien holder (not the mortgage company) or does it go to  the county? 

A criminal investigation might lead to getting your property back sooner and a prosecution could lead to restitution being awarded which is more likely to be collected and paid to you than a civil judgement.

I just evict, get the judgment and keep the judgements current until they are paid!

Trying to understand if the situations and judgement calls that are being made are in line with normal situations for this industry and learning to make those judgement calls as I am starting out my career.

Just means that you've crossed ONE step.Listen, I appreciate you trying to poke holes in this transaction.. trying to point out flaws, critical errors in judgement, or perhaps legal reasons why that deal is illegitimate.  

Only had one person try to avoid payment so I got a judgement and he used to tell me you know 90 % of judgments are never collected.