responsible" is interchangable with liable, the lender or servicer is liable for any penality assessed for late payment but only if there area sufficient escrows to pay the amounts due and to collect no more than 10% of actual assessments,,,basically.

My mind was made up that the tried-and-true power of sale provision was necessary and sufficient, especially for a $70,000 loan on about 50% ARV.

but then the other side of the token is that's more people looking for me.

For buying and holding:Buying at a price below market and at a price where the property cash flows given market rents in your area and approximating cost of ownership.Also, good tenant screening: doing sufficient due diligence of looking into your renters .

Basically, I see this as a basis for the agreement to be overturned if a judge was so inclined and order the return of possession and funds to cure other related matters lacking sufficient basis in law to cure the matter equitably.

And nobody has sufficient resources to find every motivated seller.

I spoke with a lender last month that is very relaxed lending to foreclosed clients with low credit score as long as they could prove sufficient and consistent income from there employer.

In the only case I dealt with, the inspector's sheet was sufficient, but that was not a Fannie Mae loan, it was a local commercial lender.

If she is really not on top of what it costs it doesn't mean it is necessarily bad but you do need to  get sufficient information to know what you are getting into.

Your question(s) concern the perspective of a junior lien holder as to how s/he is affected when senior mortgage goes to foreclosure sale.Generally, Junior lien holders are "wiped off" but the debt is not wiped out and remains, but unsecured.As a junior lien holder, remedies include:1) advancing funds to cure first mortgage in order to protect position;2) hoping for a forced sale that generates sufficient surplus (overbid) funds to pay junior debt;3) litigation to set aside sale due to claim of deficient noticing to junior bene (lien holder)Junior lien holders' claims for over bids are typically "pro-tanto" in nature, in that they are paid according to order of recordation, absent subordination agreement that would change order of lien position.If you are considering investing in junior trust deeds or mortgages, be sure to study title laws specific to the state(s) you are considering buying notes in.