If the property sustains uninsured damage, the buyer may lose incentive to pay, ask you to accept less money, or even abandon the property, again leading to foreclosure.

I am looking for something I can do part time and looking at Buy and Hold deals is acceptable.  

Bleeding heart will make you feel sad for that first person too if you deny them...Once they accept, let the 2nd person know the prior application was approved and since you didnt process her application you are refunding the application fee. 

A question I have is that if the purchase contract you use with the seller says "Seller agrees that the buyer 'me' may place signs and show the property immediately upon acceptance of this contract by both parties

The investor accepts responsibility for curing the property and unburdening the owner.

. $1.9 million is still owed but a deal has been worked out with the bank and they have agreed to accept less.

@Joseph SangiminoWhat will you bank accept as verification?

From  business standpoint I'm looking to recheck their income and see if they are still acceptable with 2 out of the 3 people who were going to move in.

Everyone has their opinion on what is acceptable but personally I wouldn't be getting into personal conversations over why someone has bad credit and what they are doing about it etc.What about income levels and length of employment?  

Here in NY anyone with a pulse that doesn't want to work can get on Sec 8, but few landlords want to accept it so there's a huge demand for Sec 8 rentals and very little supply, which is why you can get astronomical cap rates.