Primarily because the Tax Court, as I'm sure you may be aware of, is horribly chaotic in their decision making process, and I'd argue predicting their actions would fall outside the capabilities (no offense intended).

If he does an act that creates liability for the property you are just as liable as him unless it is a criminal act. 

I am an attorney working in criminal litigation, prosecution, but I also have experience with landlord tenant law and real estate law.  

I can't tell you how many people ask me to diagnose them on the spot in the grocery store (if they haven't already diagnosed themselves via webMD lol).I'm sure everyone has heard the saying "Better to be thought an idiot then to open one's mouth and remove all doubt", well, when you make statements like you have in this post regarding 99.9% of Realtors being unethical you have removed all doubt.I don't take offense to you insulting a Realtor specifically, I'm annoyed by the ignorance it takes to make a blanket statement as you have done, it sets off alarm bells in my logical mind.Haven't you heard that 100% of all real estate investors are Scum Bags?  

We look at how often people move.I only disqualify for evictions, income, and serious criminal activity.  

Is this a criminal, or a civil matter?

Just sounds like the branch president is doing a CYA.They want to show they didn't let you run wild so if something imploded later they wouldn't be seen as grossly negligent.Employees and board of directors at banks worry about their jobs and facing criminal charges if a bank goes belly up down the road.The bank is demonstrating prudence.  

Are they willing to:-take phone calls-screen tenants (credit/background/criminal/etc)-book appointments-show the condo-place ads/other marketingOr would they rather outsource all that work to an agent?

Those pull criminal, eviction, and credit.

Absolutely get an attorney, go to the DA with a fraud charge as he didn't secure the note as he led you to believe, not just a civil suit but criminal as well.