It may be that you had a great run on valuations do to a rising market and you don't see that going into the future. 

Them moving in wouldn't necessarily be a reason for a denial but other problems can arise that are more serious in my opinion.

Another situation my arise, where I would purchase these properties from my mother should she ever need liquid funds in retirement.

What we call things is important to communicate....A pre-foreclosure should mean a borrower has been given a formal notice of demand that the mortgage is being accelerated to maturity arising out of some event of default.Might as well throw in "slow pay" meaning a loan that has had a poor payment history and is likely to be called due or accelerated to maturity due to some event of default.Slow pays usually are canidates for short sales, with pre-foreclosures.

That is why he wants to avoid just brokering the good deals to the public.Now the issue arises if he speaks with a seller about listing and then decides to turn around and buy for himself before advertising to the general market.

I want to have liquidity so I can pull the trigger should other deals arise.

What issues can arise from something like this in escrow?

Transparency will be your friend when an issue arises and you can explain what is going on with the end investor and why it is going to take another week for the property to close. 

The result will be the same if a special assessment lien arises after the federal tax lien is in existence.

Not applicable for commercial.Problems will only arise (unless mb's will be audited) when a deal blows up.