Borrower has agreed conceptually with the idea of an extension coupled with a pre-signed / notarized DIL that we'd contractually agree to not record unless he defaults.

If they default on the units or not pay the HOA then it can be trouble for the complex.  

Louis -https://fred.stlouisfed.org/series/CSUSHPINSAConsumer Financial Protection Bureau -https://www.consumerfinance.gov/coronavirus/cares-act-mortgage-forbearance-what-you-need-know/Bankrate -https://www.bankrate.com/mortgages/federal-reserve-and-mortgage-ratesNational Association of Realtors -https://www.nar.realtor/sites/default/files/documents/2020-05-11-nar-flash-survey-economic-pulse-05-14-2020.pdf Forbes -https://www.forbes.com/sites/alyyale/2020/04/17/buying-a-home-during-the-pandemic-dont-expect-your-everyday-home-purchase/#fadad3d33b0cWashington Post -https://www.washingtonpost.com/health/2020/04/21/coronavirus-secondwave-cdcdirector/

Dave Ramsey calls it "landlording by default" and not by choice. 

You are putting in all the money upfront, if he defaults on his payment he still would own 50% of the house. 3.

They don't want to default on their car loan or their home loan or their credit card bills, whatever happens to be cause they'd get too into debt.

After buying the house cash, you will then have to come up with rehab money.With prices up as much as they are, most people in default can sell and walk away with some money.  

You essentially buy a 100 HOA liens, serve a 100 mortgage companies and hope 2-3-4-5 of them let it slip through the cracks, don’t respond, you default them and wipe out their first lien position.

Has the 1st ever been defaulted upon5.

In the event you default and the bank has to foreclose, the seller risks losing their investment if the sale of the property only produces enough for the bank to recoup their money, and nothing remaining for the other lien holder.These are extreme examples given that a bank would be unlikely to lend on such a low LTV in the first place, and even if they did in the event of a foreclosure sale the price would most likely be able to cover the 40% LTV and more.More likely it would be a bank at 70-75% LTV, the seller in a second position anywhere from 1-25% LTV and yourself making up the balance.