I suspect in that type of market the 401k takes a major hit too.

They didn’t deed the property back to the “owner” — what I suspect you’ll find is that they did this to help clear title. 

If you need/want to sell the note in the future, the note will be heavily discounted by potential buyers because (1) it’s a private note and not compliant with Fannie/Freddie guidelines making the potential market for sale small (2) buyer qualification is suspect and most importantly (3) note investors want a 12% or more yield to maturity; if the note you hold is say 7% for 20 years this results in a 30% discount from principal. 

Either way, I suspect you will need to show proof of work done, have to get a new appraisal and find the right lender.

I suspect Chris Ward has minimal understanding of Real Estate and is proposing this primarily to obtain votes. 

I suspect the selling costs would exceed 5% plus loan costs but this is not the only item of interest. 

I suspect it is solely because that is what they are used to. 

If so, I'm not sure what the grounds would be unless part of your written agreement includeds a right to recover the property if the buyer failed to make the payments.However, even if you have a right to rescind, I suspect the title you recover will be encumbered with any liens or judgments your buyer and his successor caused to be placed on the property, including any judgments other people he defrauded obtained, judgments the state or Federal government obtained in prosecuting him and any liens recorded for failing to pay taxes on the proceeds of the fraud.I think you need a very good attorney experienced in this type of situation to advise you of your options. 

These old houses sometimes have sewer issues, and this place looks like Roots City International.To me the house looks "Cared About", I see some proper looking wood trim under the porch, the porch columns were not replaced with 4x4's, all windows match, etc...Plus this house might have an interesting set of interior upgrades such as built in shelves, etc...I say that because the front door looks like it has 2 side lights (a big upgrade in the olden days).And I suspect the stairway may have some elegance to it, such a a landing where that small window is.With all of the close in trees, the gutters may be full of leaves and you may find rotting wood at the edges of the eaves, and many of these old homes a have boards under the shingles vs plywood, so you only talking about replacing a board vs a big rectangle.Good Luck! 

I suspect the family didn't fight for it because they didn't want to take on the liens?