There are a huge number of dishonest (and downright criminal) people in real estate and I believe that most of them started down that path by making small, seemingly insignificant compromises at first. 

Youtube might be mankinds greatest invention. This gentleman has 7000 doors in the Boston area. Check this video of his first property and how he got the bad tenants to vacate in 30 days after his purchase. Would you ...

Some of this matters for the eviction and some is important to determine jurisdiction in a criminal matter.

We screen the candidates over the phone for salary, jobs, etc and then ask the questions about evictions and criminal records before we do a showing.

What your looking for is stable income.Pull criminal history.

Lien by USA or Dept of Justice (IT WILL BE ON TITLE SEARCH, CORRECT?)

If you do end up refinancing that's just icing on the cake.

This is due to a number of factors like age, death, power of attorney, divorce, criminal cases, loss of job, drug use, disability, emotions, intelligence, bills, liquidity, etc.

Mortgage Insurance Companies aren't stupid.The servicers have to go by the pooling and servicing agreement for that loan.All options have to be documented that were tried before foreclosure and filing an insurance claim.If protocols were not followed the mortgage insurance can deny the claim.Mortgage Insurance wants to pay out as least as possible and deny as much as possible just like any other type of insurance company.The servicer can also face a lawsuit from the investor on the loan if the servicer cannot document that they tried less damaging workouts than a foreclosure.The servicers make more money extending the loan than foreclosing with fees.I think with the short sale foreclosure guidelines the government released less short sales are happening with certain types of loans.The government dumps all the liability on the seller and makes them jump through all of these hoops now.For example it says documents submitted can be seen by other arms of the government and that you are subject to criminal prosecution and heavy fines.Some sellers instead of doing that will just buy time and let it foreclose.

The whole thing feels criminal to me.