I found a NOTICE OF SELLER’S TERMINATION OF CONTRACT at https://www.trec.texas.gov/sites/default/files/pdf-forms/50-... but it looks like its between Seller and Buyer.

This status is important because it allows you to treat real estate losses as non-passive, meaning you can offset them against your W-2 income or other active income.If you don’t qualify, real estate investments are considered passive income by default, and losses can typically only offset other passive income, not your W-2 income.

From what I can tell, you were able to obtain default judgment, as the tenant did not timely respond to the court notice, and subsequently you obtained final judgment for possession (signed by a judge and entered into official record by the clerk.)As far as I would think, the legal matter was closed/adjudicated at that time - any lawyer potentially about to take the case to represent the tenant/defendant should have seen it that way in the system.

Mortgage defaults are 1.5% where historically its 3%. so my question is - why?

Other than that all the underwriter needs to verify is your income, assets, and liabilities to make sure you can pay for your mortgage and low risk of defaulting.

Keep in mind you likely utilized the PAR agreement since it was a PA transaction which has a  default arbitration requirement  that's rarely stricken from the agreements.

Is it advantageous to have the deed in the event of default? 

Oh, covid moratorium, no thanks, f-that, i'm not doing big default rates, and we do it, LEGALLY.

Is the listing from the default company or Core? 

All that to say, PMLs are usually more concerned with the value of the property and will lend at a lower LTV regardless of ATR (ability to repay) because they know they can take the house for 65 or 70% of the value if you default in a worst case scenario.Hope this helps!