But I see it in my farm areas and I know it's happening where the OP is.  

- 1991 Honda Civic w/ 150K miles (recently purchased after 250K mile truck hand-me-down that I traded for a coin-op washer and dryer for a property) - Was making $10/hr at non-profit when I graduated from college - $0 in cash and net worth when starting in 2012 - Lived in crappy, older apt w/ 3 others for $600/mo under rent control in SF - Picked up free couches off the street to save cash- Used to borrower weekly from friends to have enough to get by - Used credit cards to save up for first FHA 4plex purchase - In last 2 years, bought $1MM of RE and over $150K in gross rents!

An interesting contrast to some of my points if I may, to the OP, @Paul C. 

Actually, I have two that are behind right now and I expect them to catch up with income tax refund money (they are behind, but are paying).But, on the other hand, it seems that many people have one of those life events that the OP mentioned.  

My goal was to raise awareness to the OP of the whole DOS situation.

In the commercial Multifamily space the loans with the "huge prepayment penalties" as described in the OP are typically CMBS loans.

I found this that might also be of interest to the OP regarding the original question http://www.biggerpockets.com/forums/48/topics/10749-newbie-from-atlanta-needs-exit-strategy-on-duped-deal

I don't want to have to measure rooms or balance heat flow calculations, etc.Note to OP: don't use these numbers, as they vary city to city, and with size of house.

I have to agree to Jon's disagreement, simply on the basis of being a lienable item as opposed to a collections affair, but I still don't think the OP should or need be held accountable in the end.

Those are the people who could get hit big time with another drop, if there's one.I don't know about the OP's friend, but sometimes people are afraid to make a commitment as big as buying a house, they tend to look for reasons to stay on the sideline.