About your father's home. I think what you suggested to your family, i.e., turning it over to the mortgage company, may be the best way to go. If she's going to list it, there are fees that are associated w/listing w/a realtor. The questions that need to be addressed are...what is the house worth? Is someone going to go in and update/clean it up or sell as is? Maybe these are the questions you and your brother need to discuss w/your sister. I understand the sentimental angle, but someone will still purchase it from the mortgage company and love it just as much as your sister did.
You are also correct that the bill collectors, etc., will come out of the woodwork once it's sold looking for money from the estate.
I am so very sorry that you and your family are having to deal w/this. I hope that you are able to resolve all of this in the next few months.
BTW, I agree w/kml...GF couldn't maintain wearing the mask of a kinder, gentler individual. Sometimes, it takes a while before the flags pop up. I am sorry things didn't work out better w/her.
Sit quietly, the answers will reveal themselves when you least expect them to. The past is gone, the present is a gift and you need to focus on today, allow the future to reveal itself when it is ready.