Check your contract, you may forfeit any claim to earnest money by not cooperating with the banks requests.When the property sold the first time around, the market was made on the home.

Do you have a clause in your lease that indicates the tenant will forfeit their deposit if they move out prior to the lease expiration?

A couple banks have a very tight addendum that basically says, "At our discretion, we can take as long as we need to get clear title and close this deal, and you either need to wait or forfeit your earnest money."

Investors forfeit entire deposit after it is sent in.

@Stacey Everett Do a Lease Purchase with a 5% down.Buyer forfeits the down payment if defaults.

Management may, at its option, declare this Agreement forfeited and re-rent said premises without any liability whatsoever.

If you go past that time then you probably will forfeit your deposit. 

Our current plan is to have her give him a polite 30 day notice, and say something like "Per the lease you will forfeit your deposit and owe an additional month's rent in order to end your lease early, however I am aware of your situation and am willing to allow a lease break without the additional month's rent".

In the lease they're are stipulations for all of these things to occur and if not the lease will be forfeited.  

Once that time-frame expires (90 days in CA if I’m not mistaken), then the lender forfeits by default their ability to call the note due to the take over and change in ownership, thus eliminating the risk for the note being called at a later date for this reason.