So in a perfect world seller would keep their existing mortgage (which I believe if owner occupied conventional) and a portion of our payments would go towards paying off that mortgage.Wraparound mortgage seems like the best bet and I would like to try and mitigate the risk of seller defaulting on their mortgage by paying through a third party if possible.  

If a borrower is in default under their plan (delinquent in post petition payments or failure to pay for un escrowed taxes or insurance), you can file a MFR.

My definition of competitive might be different than yours but by default a cash out loan carries a higher rate than a purchase transaction.  

From the data we have seen so far only 15% of forbearance have actually defaulted and are in trouble of some kind.

If you can get a great location and a great asset and a 4% cash on cash return vs a poor location and a poor asset and a 25% return... take the easy money.  4% returns with debt paydown, appreciation, and extremely low % risk for a default on payments, low turnover cost and an asset with everything brand new is going to save you time, headaches, and most importantly limit your risk.  

Our debt is substantially more today and massive spikes could lead to the federal government defaulting on loans. 

The FAQ for SCAQMD Rule 1403 (http://www.aqmd.gov/docs/default-source/compliance/Asbestos-Demolition-/1403-frequently-asked-questions.pdf) states the following: - Survey requirements do not apply to an owner-occupant of a residential single-unit dwelling who resides at the property and solely and personally conducts a renovation activity at that dwelling - No Notifications are required for ...

There are states where a cfd is beneficial for an owner but in most non judicial states they actually will take longer and cost more if their is a default

Totally depends on state law- in most cases, when a lease expires it will default to M2M with the same terms. 

What happens when/if a loan goes into default?