We are private lenders in the process of trying to take back, through DIL or foreclosure, an unoccupied SFH that is in default by the flipper/borrower.

lets say A tax lien investor has A portfolio with a face value of lets say 10M in tax certificates, it should be characterized as non paying notes, the lender will request a certificate assignment note that should be held in escrow as collateral and as long as the borrower pays his interest nothing has to happen, if the borrower defaults then the assignment gets recorded.It become some kind of difficult when certificates start getting redeemed, unless the investor has enough certificates to always put as collateral instead.The other way, is to add the lender onto the entity that owns the certificates.In any case, if anyone knows A firm that does so please inform.Thank you.

You are the one in default of the contract.

That just guaranties you will loose (default judgment).Laws vary GREATLY by state.

But I get it, at the end of the day, its a risk for the lender and their whole thing is to minimize the risk of default.  

At this point you can tell if you click and get along or not.An easy default to ask yourself is "would I want to go get a beer with this person".

That’s because the mortgage secures the promissory note and gives the lender the right to foreclose on the property in the event the borrower defaults on the promissory note.

I know I can risk it and see if she defaults and it goes back up, but I also risk losing the house.

The defaults are happening in poverty blocks that don't post here.

A few years ago, set-daughter's name was removed from the deed, but remained on the mortgage.Step-mother had a few loan mods, then went into default and stayed there for 2 years.Step-mother passed away in April, left a will leaving everything to step-daughter.  (* I have seen the will and this is accurate.)