They do have means of checking and they in fact check to assure that you are owner occupied.

I suspect the first thing the insurer will do is contact your Grantor (the mother) and find out what she intends on doing about the problem since I assume she signed a Warranty Deed and a Seller's Affidavit where she assured you and the insurer no one else had an interest in the property. 

The lender assured me there was no other issue.

This may seem like a trivial, or academic nitpick, but I can assure you this is of prime importance to how I structure my database.

,Buying turnkey is only a purchase method, it does not assure you that you are getting a good property or that you are going to get good tenants.

I would query the assurances of "Valued in the 160's".  

It's assuring to hear good news and not get out now by some of you with experience.  

He assures me he has no trick.

I haven't submitted my earnest money yet due to everything being closed for the holiday but once I have..rest assured I had better receive  the above documents in a timely manner or I'm out.From my understanding the wholesaler found this investor through a mail campaign he did a short time a ago.

Yes,  pre-qual give them assurance about your eligibility for loan.