@Frank Yang & @Ron Flatt the rules that govern loans and the "loan limits" are a combination of the Dodd-Frank, CFPB, Consumer Protection Act, and others (SEC is the Securities Exchange...that's for trading of stocks and what-not).  

@James Yang that's a great idea, but I'm not sure it'll work for this couple.

There are many factors at play--the local market, availability of property, your skill set, how much capital you have, supply and demand of for-sale housing vs. rentals, etc.

After the sale, he drove by, found out that the house had burned down and that his first responsibility was to remove what was left because of code violations.

@Nhia Yang, have you spoken with a commercial lender?

Basically what I would like to know is where do you start when you live in very expensive California and don't have capital coming out the ying yang.  

If he can understand the ramifications of foreclosure vs. short sale, he may decide to move forward.

We open probate but get little traction until a very smart, young litigator attorney sues and settles with the guy who buys at trustee sale. He

@Sean OToole  there was a broker here in PDX who was doing that.. he wanted me to fund them.. he would set up a straw man for the short sale he wanted my POF.. then when it closed he would pay the straw man a little bit and pocket the rest..as he was running this by me I just left the rest of my sandwich on my plate and left LOL.. and told him I don't think that is legal bud..

Morally speaking... if the agent did no work and didn't procure the sale, he or she shouldn't be entitled to a commission.