With the Mortgage Forgiveness Debt Relief Act off the shelf id be liable for the forgiven debt if I were to successfully conduct a short sale.My wife and I both work, so with some new lifestyle modifications, we have been able to afford to keep making payments (even with no tenants).

If title insurance is not offered, then it's totally buyer beware and you have essentially the same risk as buying on the courthouse steps.Question 2:  You don't have much opportunity to conduct more due diligence than can be accomplished from the curb.  

The tax certificate sale is conducted in a manner similar to an auction.

Developers, who do lots of market analyses, are pulling out because of local government regulations making it difficult to conduct business. 

Usually, the servicer is given the power of sale and appoints a new trustee under the deedof trust or mortgage to conduct the foreclosure sale.

And in this business it's not too hard to find the right people to use as a building block, and in the long run your not totally using them because they benefit as well as you do when they conduct business with you!

Conducting the due dilligance may cost money when researching tax property, so be aware of that.

There will always, no matter what business you conduct, there will always be somebody doubting your efforts.  

You can conduct your own search, YES.

You just have to be certain to conduct scheduled maintenance.