Typically this is because a borrower gave the property back to the bank with a deed lieu of foreclosure.  

This typically is investors.

But again, condo's sell on "comps" and apartments ( i know you listed a 3 unit in your example but regardless) typically trade at what they make.

Does anyone know if in Maryland, for the auctions that happen on the county courthouse steps, have the foreclosure deeds on each property already been executed or is there typically still a waiting period to have this done?  

Most are not distressed, however and estates sellers are typically aware of what they have and not rushed. 

How does that typically work?

Also, what are the typical requirements to qualify for the refinance?

In the CA example you are talking about an exceptional appreciation rate that is not typical and will not continue forever at those rates.

I estimate it will take .50% to .75% in rate increase on typical cases to absorb this.

You mentioned Trust Deed Investing, which is essentially investing in paper secured by real estate.