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Your pledge process being longer than 12 weeks (and spanning more than a semester) is raising my risk management flags. The fact that they are trying to get you to sign contract to live in the house BEFORE you're even initiated is also raising some flags (GCers who have more experience with housing, feel free to correct me if this is standard practice).
Based on these things and the fact the organization is under the microscope of the national organization, as well as the structure of your pledgeship seemingly falling apart, I would have strong reservations about initiating into this group. I'd definitely touch base with a chapter or faculty adviser or someone from the national organization and see what the story really is.
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