@Matt Wells typing this out might get complicated in a hurry so I'll try to summarize and you can certainly reach out directly if you would like to talk it through.Conventional loans categorize loans into 3 main categories:  Purchases, No Cash Out Refinance, and Cash Out Refinances.  

I've seen allot of social media about trusts and holding companies and I don't want to get too complicated but want to protect myself and family from legal issues that could arise......Thanks again for your advice!

As for setting up the trust, that's not very complicated either.

I had a rather complicated RE play I was doing in 2012 and of course financing was still non existent I sent a basic concept plan they looked at it for about 3 days and came back and said hey we like it just need 10k to move forward..

I would focus on opening the lines of communication rather than making the situation more complicated by trying to introduce another new agent to the mix and try to claim abandonment to exclude the original agent.

Learning how to invest in a house isn't that complicated.

OOS just complicates things for most people. 

If he doesn’t file for bankruptcy and holds on for a little while longer while getting the 1st short sale and then is forced into bankruptcy anyway, it is conceivable the trustee will seek a "claw back" on preferential payments complicating both his and his previous lender's life.

I would just really stress the complications associated with transferring title post-close with a conventional mortgage.

You don't need a license to wholesale, and it can make it more complicated if you do have a license.