IMO Delaware is best for setting up your LLC because if lawyers do get involved at some future point, Delaware has a long standing fast track judicial process that helps with protecting the best interests of the LLC.

Btw:  All landlords should have three forms:the application form itselfa checklist form to evaluate the acceptability of the given information and the info obtained via the CR and BG checkand a formal Rejection Letter, stating why the application is being rejected (copy it, mail one copy and keep the other.) 

I dont do anything formal, I just present the offers verbally. 

Unless you can take your deal to court for a judicial foreclosure and win, the granting of any equitable interest will be what the lender says it is, the opinion of any investor type or that of any guru is irrelevant, you're going to foreclosure, period!

Idk but I think I will file a formal complaint hopefully with or without the help of my lawyer and I think I will write a note to the mayor because this shouldn't happen.

There is a formal agreement, "Co-Lisiting" agreement or "Cooperating Broker/Agent" agreement.

Nigel and Wayne are right: you need to fight the foreclosure in court (I am assuming you are in a judicial state where foreclosures go through the court system).

When a borrow breaks one of those conditions in a non judicial state the lender does not need to seek a judgement from court to begin the foreclosure process because they already hold legal title to the property.

Given that it is primarily restricted to certain states, do you see it increasing in popularity among states that don't [formally] recognize the structure?

I handled it by sending an email to all of the tenants as a friendly but formal reminder of rules notifications.