If no transactions could occur when one of the parties had a checkered past, there wouldn't be too much going on in the real estate world. 

Jason Sandegren , it did not occur to me that a portfolio lender may waive PMI!

I am Ok with that in general...I know that part of a good deal is better than no deal at all :-) but it occurs to me that I might find another way and should actually be searching on my own anyway.

https://www.realestateconsulting.com/8-big-housing...TLDR; Prime real estate will be unlocked for new home construction (parking lots, auto dealerships, gas stations).Outlying drive-until-you-qualify housing markets will eventually reemerge once the majority of core infill markets have repurposed their prime real estate.Urban employment should continue rising as prime real estate is repurposed for housing, allowing more people to live closer to city centers.Density will increase, with the days of wide streets, massive driveways, and two-/three-car garages a thing of the past.Construction costs will decline as transportation costs plummet for moving building products from manufacturing facilities/warehouses to new home construction sites.Fewer home sales will occur, as the elderly will be able to stay in their existing home long after losing their driving rights.Assisted-living facility demand will be less than most people expect.Repair and remodeling will flourish due to seniors remodeling their homes to age in place.

I'm a private lender who always requires this and we actually had a borrower who took a loan out and within weeks of funding, the very scenario occurred.

If you take this on, this will occur. 

Just curious what others are seeing in practice, and if this is typically what happens, or if I am way off base here and a large re-assessment based on new purchase price usually occurs regardless of what I mentioned above.

But from about a decade ago (the 2008 crash I would estimate) until now, a lot of development and flipping is occurring - hence my analogy to Detroit.

On-market supply has remained low and thus fueled more demand, however, we anticipate on-market supply to significantly increase as owners begin to hear about the record-breaking sales occurring right now.

And any eviction would most likely occur after February 21st, which is when she was supposed to move out anyway.