They need to figure out their personal issues on their own.

A "portfolio loan" is a loan which is serviced by the lender who issued the funds (i.e. held in their portfolio), rather than being packaged together with other loans and sold on the secondary market.

We did end up moving out of state and didn't sign a contract with them so that's one of the big issues going on.

thanks @Deanna McCormick I have a good idea about the rent rates, I was mostly concerned with any legal issues with raising rent to market.

It's a common issue/suggestion.

The issue arises when the lender is not on as a loss payee and the owner takes the funds and runs.

Getting approved for a loan will boil down to one thing: the bank's belief in your ability to faithfully pay back the loan without any issues.

A receipt for the purchase payment is issued on the day of the sale and the deed is issued within 4-6 weeks.This would lead me to believe that the structure of a HML loan would be very different from counties in the Northeast.  

(There have been counterfeit bank check issues going around too)

You will see this sometimes when there are known issues and the seller doesn't have the resources or the "mental strength" to deal with the process anymore.If you want to proceed further, make sure you speak to your lawyer about what's needed.