If your policy is similar then I would deny the potential tenant AND you also need to figure out something regarding your current tenant, the last thing you want to happen is for your insurance policy to lapse due to this.

Due to the time lapse his schedule was shot for a long time to work on it. 

My lease says if renters insurance lapses, added rent of $250 covering insurance would have been assessed. 

I have had employment since I was 15 i have all the records(kindve particular when keeping paperwork lol) with no lapse and just a little over a year at my current job.

If so, a case can be made that the contract lapsed and is no longer binding or in effect (and, accordingly, you may have a claim for your EMD). 

Hi Bill,sorry - I don't get your point.If I agree to the contract and penalties involved, then later swap my AT&T iPhone over to Verizon and pay my dues...what ethical lapse have I committed ?

He claims there is a 21 day lapse before it hits the REO department.

The only reason you were able to remove your tenant was because the Federal moratorium has lapsed.....it will be extended once they work out the next stimulus bill.

In the event that the insurance expires/lapses or for any other reason is not renewed, the additional insured will receive notification.

Even though its lapsed and you're now month to month, it will still govern in situations like this.Will your wife still qualify under whatever criteria your landlord applies?