"She rented out two of the units and lived in the third. Colebrook refinanced her mortgage in order to renovate the property and help buy additional homes to generate rental income."

Maybe OneWest was overly aggressive and incompetent. But the fact remains that she was aggressive in her investments and overleveraged, and she was over her head once her tenants lost their jobs. With her only living in 1/3 of her "home", it might not be possible to get on the federal program, which in turn was not well administered.