It was a mortifying tail between the legs moment, but my primary emotion was blame towards the tenant.After we sued and won, we never saw a dime, but the judge proclaimed that we were right.

I believe your emotions are in the way here as anger and fear of an eviction is not the way to handle it.  

I used an interest only LOC in my purchase calculation, maybe I shouldnt of but it was a cheap house that I can pay off quickly so the financing part is just temporary. 

You are letting your emotional stories paint a picture of how your future should look like.

You're looking at the house as a financial investment, while simultaneously dealing with someone that is looking at the house with an emotional investment; the two do not mix.  

Being before Christmas she should be able to find a temporary job.The key will be if she had a job making 9hr before then likely can replace that income now or if she had a really high paying job then doubtful she will find a similar one during the holidays.

Although, it would likely involve at least a temporary move to a less desirable area.

For temporary (1 or 2 day) inconveniences, I've sometimes taken a small amount off the rent.

In our present political environment, it's an unlikely prospect - our federal government brought in legislation a few years ago allowing companies to bring in "temporary foreign workers" and pay them less than the standard wage for the industry in which they are working.The $15/hr proposal sounds like a similar idea to a living wage.

Are you sure the 2.92% isn't a loan mod, which is temporary?