Maybe a different division of the bank or entirely different entity that wanted the option to pursue a deficiency  on the HELOC.  

They are going to have a "deficiency judgment" against them if it does not sell for the amount of the lien.Their credit is going to be buggered up - they are going to have problems with buying anything that needs a credit rating.They are not in a good place - the bank - lawyers and others want their money and they are being harassed (good reason to not answer the phone).Now ---- here you come - you want to control some equity - you want to make some money - you may want to flip this property!

These repairs, deficiencies that were fixed by the previous owner, passed but with the most minimum of standards. 

You would loose financially big time by 1- she pays no rent and essentially lives for free for a few months. 2- they claim deficiencies in the apartment trying to invalidate and delay your eviction proceedings. 3- she can probably get a pro bono lawyer; you would pay up the ying yang for yours. 4- yes eventually you will win (3-6 months), but she could also leave you with a parting gift of further damaging the unit (and trying to collect on a tenant with a zero net worth is futile.)You seemed to have already caught on to most of what I have said, so your intuition is spot on!  

Obvious deficiencies in the house, condition red flagsAll those things can be determined by a professional you trust.

Similarly, if everybody else has air conditioning and you don't, that's a deficiency compared to other properties and will bring your value down.so, spend a good amount of time making aware of what your competition is doing and make sure that you don't do anything more or anything less.

Also that helps when that pesky annual inspector comes around and tries to give you a "bill" deficiency report.

How can the lender a deficiency judgement ?

It was a short term loan and I ended up defaulting and the lender foreclosed.Now they’re pursuing me for a deficiency judgement, my LLC and my name.

Regardless of HUD's guideline, I have found an obvious deficiency in the first appraisal.