Unfortunately the title report and survey show an easement that will prevent this. 

Unless you plan on doing all the work yourself, you should factor in termite inspection/prevention, possible tree removal/trimming, clearing gutters to prevent leaks, sending contractors to fix things that break, painting unit after each tenant, changing locks after each tenant, cleaning, appliance maintenance etc. 

For individuals who have used a low fee custodian, what kinds of issues have prevented custodians from providing consent to the owner?

In this example, lets say the mortgage is for $500K and the property was $700K and is now worth $350K.Are there typically terms in the mortgage that prevent or allow this?

If the auctIon requires funds in cash, you’d have to have the funds there with you, which seems expensive if you dont end up acquiring the property...Does this prevent hard money lenders for lending on properties to be bought at auction?

Roaches can be killed pretty easy with a few aggressive treatments and ongoing preventative maintenance. 

Gets you in the house and it’s just common preventative maintenance for a couple bucks.

Since I can't locate and set fire to the offending unit, I'm hoping there are preventative steps to keep them at bay. 

There is also nothing that prevents a contractor and a client or potential client to make other agreements regarding payments for example if someone wants the job done for 90% of the quote a contractor may agree if the client agrees to provide the contractor with a 33% down payment to get thing started.

Odds are you will never collect a dime, but it only takes 30 minutes to turn them over to collections and you may get something out of it.At a minimum, it will sit on their credit report and may prevent other Landlords from making the same mistake.