Don't bother retaining a lawyer unless they take you to court.Just send them a letter indicating that since they defaulted on the lease they forfeit the deposit (use what ever wording applies to your state regulations).

To me, pre-foreclosure is the default period after the due date or, after the default that triggered a demand (Taxes, insurance, illegal transfer, etc.) but before the filing of the notice of default (Or first legal in a judicial case).

For this I cite Fannie and Freddie default rates during the 2007-2009 period where they were below 1%.

Could potentially set up a "land contract" so seller feels secure with immediate take-back, and no need to "foreclose" in the case of default.5.

You are doing too much babysitting.I owner occupy, so I babysit on this by default. 

I was recently presented with intel about a particular home in Northern New Jersey, in which the current homeowner is in default.

This is a permissive clause, or "event of default" that allows the Lender to call the loan due under a "performance default" (as opposed to a "payment default") or not as the Lender chooses. 

What would my bookkeeping journal entry be if/when the buyer defaults on payments, and I get the property back?

My portfolio of performing mortgage notes yield 16.5% annually, enhanced by two notes I purchased at significant discount, and one that matured and the borrower is paying the default rate.

This is a permissive clause, or "event of default" that allows the Lender to call the loan due under a "performance default" (as opposed to a "payment default") or not as the Lender chooses.