Short a court order, the lender is absolutely correct.  

because she declares income while being overseas, she can exclude the first 120k from federal taxes.  

This was landlords burning their building because the city had obtained a court order REQUIRING landlords to continue to support and operate money losing apartment building.  

This is a big challenge to every one of us.Not allowing tenants with cats is possible but tenants may cheat not declaring cats. 

Text messages can be a start, but if you ever go to court, I can tell you judges don't like text messages. 

Charge a one-month nonrefundable Holding Fee or Rservation Fee.Document it well, so if they try to take you to court over it, you are covered.

While you don't mention what state the property is in or the amount of the missed lien you or the title insurer might be able to either put up the cash or buy a surety bond and post it with the court.

Here is a link to a PA court's website FAQ.

Government subpoenas can be and are declared invalid by courts all the time.  

Rather than take a complete loss on the uncollectable debt, can I take the assigned debt, make collection efforts and upon failure to collect declare the loss to offset the capital gains?