Best of luck with your procedure.  

The power of sale allows the lender to send an acceleration letter demanding the loan be paid in full or foreclosure procedures will be started.

The simplest procedure is to find out what is owed to the bank including late payment penalties, fees etc.

This is correct procedure.

@Bruce Weyer Your procedures as far as accruing your property tax and creating a bank sub-account for your reserve are perfectly fine since it serves your purpose without skewing the numbers. 

Oviously we need an attorney for this.Here's our procedure list so far.

We all agree that it is a potentially dangerous procedure but, in your experience, have you run across any indication that it is considered fraud under any particular laws?

The section 8, HUD and CHCS inspectors that I deal with are satisfied if this procedure is followed and nothing is loose, chipped or flaking.

These examination procedures do not cover the state registration requirements.What is confusing is that CSBS and NMLS are not federal agencies, but they were the source of this model legislation.I hope that answers your question.

If your intent in purchasing that house was primarily to resell it (pretty much the definition of flipping) then no matter what you did procedurally it will not qualify for a 1031 exchange.