Peter -this story is wild! Sounds like there was quite the scam going on here. There is also so much going on right now with vacant and abandoned properties - many homeowners have just walked away, thereby abandoning their homes, due to potential foreclosure. Homeless persons are searching for vacant homes and laying up until rousted! In the process of inspecting REO properties for the Bank, I have walked into setup situations where people have set up home - even brought in their own television, bedding, kitchen equipment, coffee pot, etc. Wild things are happening right now.
The Bank is looking at this closely and are considering they should try to keep the homeowner in the home even after foreclosure, until it sells.... these are strange times.