They both insist that there are creative ways to structure this deal so that me and my mother can LEGALLY , and secured by CONRACT, be able to collect the net proceeds, and split it 50/50 as her and I agreed from the start.One of the proposed arrangements I researched and sought legal consul for, and am fairly certain would in fact still be an act of fraud.A broker brought in an investor who proposed the idea of purchasing the Mortgage Note, and giving us the difference, secured of course in advance by a contract where we would agree to forfeit the Security(house) once the note was purchased. 

@ Nick Brosco, like Kevin Romines said, it sounds like a misinformed loan officer, or possibly that that particular lender has more restrictive rules that they impose on top of Fannie/Freddie guidelines.

Make sure you talk to a CPA and Attorney regarding all of the tax and legal aspects, someone who knows the state you live and will be doing business in.  

Congrats Jodi,Sounds like you got a deal and times it right Hillary ,I’ve been listening ok’ing at flood deals for a while now , from the deals that came my way the wholesalers are looking for 60-50% of the ARV , that doesn’t leave you much room for error , market correction or stigma of a flood home even in a good area .Take off 10% for commissions, legal  & closing on sale , you are looking at best a 12/20% return on investment .Now imagine if the mold situation comes or contractor goes over budget , you may be stuck holding a wet bag If your plan is a rental than at least you have a plan B in place For the best upside of 20% I’d stay clear Of course if you can purchase at 35/45 From ARV that may be worth considering IMO the Flooded homes are going to be in the market for a while - based on the fact many owners are just hanging on and not paying mortgages .

I know there is a legal contact in place but still worried of worse case scenario.

Where it gets legally weird is that her parents took over the apartment, as they were paying everything and the executors of her estate.

@Andy Bondhus I don't know the legality behind any of it but I do know that a lender can offer a program with specific features, in this case escrow, and if you do not agree with it, they do not have to lend. 

Account ClosedWater lien has no legal right to the property, if you pay for it as a 3rd party.

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