DF encourages responsible underwriting practices (verification, documentation, reasonable DTI etc.).

If you require income verification and they can't provide it, then move on.

This concept is identical to banks or any credit-granting institution charging a higher interest rate for a perceived higher-risk loan.This is an extreme example, but should be a fair way of exhibiting cap rates fall in line with the risk of the underlying investment.If you are analyzing a deal involving cap rates, it is highly advisable to have a commercial broker involved to help provide that local market perspective on appropriate cap rates for the area.

Employment verifications? 

In order to qualify for the "housing for older persons" exemption, a facility or community must prove that its housing is:Intended for, and solely occupied by persons 62 years of age or older; orIntended and operated for occupancy by persons 55 years of age or older.In order to qualify for the "55 or older" housing exemption, a facility or community must satisfy each of the following requirements: At least 80 percent of the units must have at least one occupant who is 55 years of age or older; andThe facility or community must publish and adhere to policies and procedures that demonstrate the intent to operate as "55 or older" housing; andThe facility or community must comply with HUD's regulatory requirements for age verification of residents.The "housing for older persons" exemption does not protect senior housing facilities or communities from liability for housing discrimination based on race, color, religion, sex, disability, or national origin.HUD is ready to help with any problem of housing discrimination.

Just trying to see if we have any identity crisis here :) 

was the any verification of employment, credit issues, debts by the originator?

He will have the forms, verification of income/employment or get tax returns and verify assets.Might also pin the buyer down to show a deposit to his bank account, monthly or quarterly to keep on track of the agreed purchased term.

Jackie, The last time I posted a response to your identical post, you did no address it.

the almost identical house i bought in the same neighborhood for 19k a few weeks prior....even putting 30k into rehab..does that sound like they're only making 10-15%...investors are greedy, and they're trying to make as much as possible on the sale unfortunately...lending, discounted notes are some other good options where you can earn 15-20%