No issues with @Costin I. deciding Steadily wasn't your best fit but you're painting with a very broad brush to say their insurance is only for total losses or that they're systematically over-insuring their properties to keep deductibles high. 

Customer purchases all paint, tools ( brushes,rollers etc...whatever).

I've read (all my knowledge is theoretical) that tenants on government assistance can be really rough on properties (I also see that as painting with a broad brush) but the government assistance side of that is pretty stable income, and it doesn't seem terribly difficult to raise rent either, just requires 60-days notice instead of 30. 

It's possible notice of the fake mortgage recording was just sent to the property and the tenants brushed it aside because it wasn't addressed to them.

And there should never be a time when any kind of BULLYING is brushed off as "light." 

If you want to brush up on PML, I suggest you check out my book Lend to Live: Earn Hassle-free, Passive Income in Real Estate with Private Money Lending available on the BiggerPockets book store.

You'll find tons of good info here, I recommend checking out a local meetup or two as they're super helpful to brush shoulders with other folks that have either done what you're doing or are asking the same type of questions. 

Essentially (broad brush strokes from a layman's understanding) what many people don't realize (and I didn't before 3ish years ago) is insurance companies have insurance against their own substantial losses; 'reinsurance'.

I wrap them in tar paper or brush on actual tar or similar substance.

He pivoted to STR projects, rebranded as Techvestor and since then brushed off questions about Scout pads or MBD.