"they owe the bank $295,000"NO according to YOU she is on title but not the mortgage.If that is true she owes NOTHING to the bank.She just has a partial ownership by title with a property that is underwater in value.Even if it forecloses she can milk some more months as a "tenant at will" before the bank can get her out.Usually they will offer "cash for keys" for her to move.This time of year with court delays for evictions it would most likely take the bank awhile to get her out.She could always try to get the husband to sign an "authorization to release" from giving her the authority to speak about the loan to her.With an underwater house most owners/tenants just care about the mortgage payment.Example house was worth 200k but now worth 130k.Mortgage payment is currently 1,600 but owner/tenant wants payment of 1,100.The bank might readjust the loan payments rather than foreclose and take a big loss.It depends on what type of loan it is and who owns it and workout options.If you bought it for cash at foreclosure then she could stay as a tenant and you have her sign a lease and she rents from you.The details will be based on a state by state basis with time lines and risks involved.She could try to buy the note at a discount or get an investor to try to purchase it on a short sale and rent to her etc.The confusing part of your statement is you said she had 150,000 cash but yet recently filed bankruptcy.Are your sure the husband didn't file bankruptcy and she received the money from the proceedings??

I continue to listen to all of above whenever possible, and they heavily influence my investment decisions.

Credit Unions are key for all states right now due to the banks due process turnover with consumer fees

A 4-unit, and the bank did not use "cash for keys"?

Hiring this PM was part of a package of a "turn-key" product.

It seems the key phrase here is "motivated Seller."

I see it and know what it is and, yes, it influences my overall impression of the applicant, but it does not drive my decision.

The key is to keep at it consistently.

Additionally, you can ask your title company or attorney to collect the keys as they too have a responsibility to pass possession to you.Someone staying in your house can be done by anyone short sale or not.

That would be my biggest concern.The last time I had a rehab in the hood I had a handyman with a key to the property check on it almost every night.I'm not against it especially if there is profit to be made but as always manage your risk.