Not sure what's up at my neighbor's house

As I mentioned in the past, my neighbor (the one with the beer in one hand and the cigarette in the other) lives in a shed in the back yard. When he quit working (the surveying business got slow a few years ago), he ran out of money to pay his mortgage, so he talked a friend from work (boss's brother) into buying the house at a price which gave him some cashing out of equity, and he used that equity to pay some rent for use of the house and to buy beer and cigarettes. Eventually the equity ran out, and my neighbor realized he had to go so he fixed up a shed in the back yard and moved in.

The house was a horrid wreck when my neighbor sold it to his friend. He had done nothing but trash it while he owned it. When his friend bought it, he brought lots of rubbish to the place in addition to what had been there before. I think he has a junk-hoarding complex. He's moved things like an old bathtubs and toilet and dead trucks into the yard. He's done a pretty good job of disguising the mess from the road, though.

The new owner actually has a cattle farm an hour or so away, but it saves a lot in gas to spend the night here, by where he works, than to drive home the nights he's in town. He goes home to his cattle once a week, though, to care for them.

With the slump in the real estate market, there's been a slump in surveying. He doesn't get as much work as he'd like. Also, cattle aren't selling for much, and during last year's drought, his grass dried up so he had to buy a lot of hay. I don't think he's making much money these days, and we think from something he said, that he might not be able to pay the mortgage by the end of the summer. We've noticed he's spending a lot more time there in the house (perhaps fixing it up?), and I see some new junk in the yard (perhaps tossed out of the house?). We think he's fixing it up a bit to make it easier to sell once he's foreclosed on, but we're just speculating.

My neighbor is trying to get social security disability, but he's been turned down. He got a lawyer who is trying again. If my neighbor gets his disability, he may be able to move back into the house and actually pay rent again. That might be enough for his friend to keep it.

If he fails at getting disability or if it takes so long that the house goes into foreclosure, we don't know how long he'll be able to hide out in the shed. If the house if vacant and the bank owns it for a long time, probably no one will no he is there.

If it is sold to investors quickly (not likely these days) to flip it, they might catch on someone lives in the back. If they don't catch on, once it is sold to someone who actually lives in the house, my neighbor will have to go because no one will put up with a man squatting in their shed.

We have no idea where he'll go. He has some sisters, but they've pretty much written him off (I don't blame them.) His mom is in a nursing home with some kind of dementia. His dad is dead and buried. His son is in Illinois and doesn't have much luck keeping a job.

Anyway, we have no idea yet how this will play out.