@Vincent M.Here are a few tips I'd recommendMake sure you do a good job marketing your unit, so you have enough applicants to have a solid set of criteria / standards.Utilize an online rental application to easily collect application informationMake sure you pull credit, criminal and eviction reportsFamiliarize yourself with federal and state landlord-tenant laws as well as fair housing laws.Feel free to message direct for specifics on any of these.

If I read your post clearly you should steer well clear of criminal money, at least until you personally are wealthy enough to insulate yourself from association.

This is grounds for their license to be pulled along with possible criminal charges.

Not sure how he did it without the 2 parties each knowing what was going on, but the mortgage holder was very upset and threatened criminal consequences, fraud, falsifying the forms, etc.

The whole thing feels criminal to me.

Part of your application needs to explicitly give you permission to check their credit and criminal history (this part is important).  

This is due to a number of factors like age, death, power of attorney, divorce, criminal cases, loss of job, drug use, disability, emotions, intelligence, bills, liquidity, etc.

Mortgage Insurance Companies aren't stupid.The servicers have to go by the pooling and servicing agreement for that loan.All options have to be documented that were tried before foreclosure and filing an insurance claim.If protocols were not followed the mortgage insurance can deny the claim.Mortgage Insurance wants to pay out as least as possible and deny as much as possible just like any other type of insurance company.The servicer can also face a lawsuit from the investor on the loan if the servicer cannot document that they tried less damaging workouts than a foreclosure.The servicers make more money extending the loan than foreclosing with fees.I think with the short sale foreclosure guidelines the government released less short sales are happening with certain types of loans.The government dumps all the liability on the seller and makes them jump through all of these hoops now.For example it says documents submitted can be seen by other arms of the government and that you are subject to criminal prosecution and heavy fines.Some sellers instead of doing that will just buy time and let it foreclose.

The only exception would be due to criminal activity that the tenant had no part in as substantiated by a police report.

Youtube might be mankinds greatest invention. This gentleman has 7000 doors in the Boston area. Check this video of his first property and how he got the bad tenants to vacate in 30 days after his purchase. Would you ...