I've never done it, but I wonder if a possibility in some situations is simply to tie up the property through a legal proceeding so that the seller can't sell it with clean title to anyone else for an extended period of time.

I would love more advice and I will keep this post updated until they vacate / the outcome. 

Update as an FYI: He said the information is not on the IRS website and is IRC 469, so he will not take the deduction and in fact will not file my taxes if I want to take the deduction.What a waste of the $225 I now have to pay him.

IF I purchased a tax certificate ready for Foreclosure (i.e. past the redemption period?)

She says that she owns the property outright and has put money into the house so it needs no updating or work. 

If it doesn't hit the above HUD probably also won't believe you will live there as your primary residence and may decline your bid until the investor period.

I'm pass my DD period and im okay with that.

The OM should show an investors projected rate of return over the intended hold period.  

Are they actually doing an appraisal update (1004D) or a discounted new appraisal (1004/assuming this is a residential single family)?

They have been in the house a longer period of time, 3 weeks or so.