If your heirs sell the house they will have to pay off the loan you took against it...just like a permanent life policy.And real estate in general must be a scam since agents/brokers make a commission when they represent buyers/sellers and that apparently is one of the clear signs of a scam.Look, this strategy isn't for everyone.

Additionally in the event of a default or bankruptcy, how comfortable are you hiring an attorney to represent you and the other stockholders in the bankruptcy process that can take years?

Not so much the people who are representing the program, but more so they charge that upfront because they are assuming most won’t do anything with the info given.  

And the fact that both parties were represented by knowledgeable , experienced real estate attorneys insured a framework in place for the best possible outcome.  

It's also about exit strategies - and this approach only as represented by your post only has one - attempt to hold on long enough for appreciation and amortization to create equity, giving you the option to sell. 

When a buyer has to sign something they will be more careful in who they chose to represent them.

In my nearly 20 years of representing landlords and property management companies, I have advised against allowing tenants to perform services for the landlord in exchange for rent reduction.

Court confirmation (In CA) is required when there is Limited Authority ~ Disputed estates or the PR (Personal Representative) cannot be bonded.

Someone at your bank, who likely never loaned a dime in his life, has decided on the restrictions they think you need to meet to comply with regulations important to him or her.What might be most convincing is a letter from your lending attorney explaining that he’s been representing you in all lending matters for 14 years (or the last x years) to ensure you comply with all state and federal rules and requirements.

It's okay to send a representative in your place if this is not a strength of yours.