I'm hoping to find some advice on how to proceed.

The woman who currently works with my loan has put in a proposal to the underwriters (or whoever they are) to see if they will accept the net proceeds (still not sure if that is before the closing cost or after) and I will continue paying the monthly amount until the loan comes due in July of 2016 in which I will have to come up with the final payoff.

@Clarissa NesbittClarissa, proceed with caution.

It's also much higher risk since you have to go thru foreclosure proceedings in a not-so-landlord-friendly state if the owner defaults or disappears one month leaving you holding the asset that may or may not be vandalized, have back taxes owed, let insurance lapse, etc., etc. 

@Daria B.An "assignment of rent" is an agreement with the borrower on a loan that in the event they do not make their payments, the rent payments can be assigned through an initial court proceeding to the lender, who is due payments, rather than to the borrower, who is in default.  

I have been told the proceeds are to go to the son to help pay for his father.

At least, that's what I thought right up until I had a deadbeat tenant who wasn't paying me and I found out how much it would cost in court costs, attorney fees, lost rent, time, etc to allow them to stay in the house while the eviction proceedings ran their course. 

I have read were the document gets put with all the other paperwork and held in escrow or title co until tenant excersizes option, but I'm finding in my area most title companies wont touch assignments or double closings dry. this is very frustrating because I know others have found investor friendly attorneys and title co. the attorney I talked to wanted a retainer before anything happens, I explained proceeds would be covered by funds from deal, maybe due to my lack of experience but I know others have set it up with their attorneys to get paid that way too.

The HOA president has made it very clear that as soon as his legal proceedings end (and he recoups his money from the repairs/damages) that he will sell his lot and be done with everything.

The proceeds from the refinance are treated as a return of capital, which does not trigger any tax liability.