These BS authorities are nothing but a sham, but such is life.Anyhow back on track.  

They were allowed to have a trusted person view the place for them if they gave authorization in writing.

The IRS will share information with state and local taxing authorities.

The trust documents will dictate who the trustors, trustees, and beneficiaries are and what authority they have all been granted. 

However, checks from the Housing Authority (for our Section 8 tenants) come to us as electronic funds directly deposited into our account.

Doesn't sound like a lot of authority.  

Yes, they'd need to grant authorization for research to be conducted on the mortgage accounts with the  mortgage servicers.

I would also follow the advice of other investors on here and take the time to report this to the authorities. 

You need to call housing authority asking about codes.Majority of tenants will stay.

Payroll taxes are being paid by the employee and employer (both you) on the $60k - they're being withheld from your check and remitted to the IRS and state taxing authority by the "employer" on behalf of you, along with the employer's own share.