"still, how will she make the monthly payments?"

Is she a child? The lender is willing to lend and she wants to try and keep the house and is willing to borrow. She is figuring out how to do that and is renting out rooms to make the mortgage. She can also sell the house and likely recover her equity, if she discovers she can't make it. Would you rather she have no way in which to try and keep her grandfather's home?

Maybe we need an easier way to become "a person responsible for their actions". Right now you have to have $200k in income or $1 million in liquid assets to be a "accredited investor", but this seem a bit steep in my opinion and quite discriminatory to us mere plebs.

Assuming she and her siblings have a good relationship, if she were ever in a position where she might default then her family would help her. The pay out here was not purely transactional between strangers.

She's going to rent rooms out, and in a prime location in California she will have no trouble setting rent high enough to cover the mortgage and then some.

This is a pretty unusual situation, hardly indicative of any trend.