File a complaint with your state agency or their regulatory agency or the FDIC and move on.

While I have the time, financial resources and motivation, I lack experience in this niche.

There's a severe lack in proactive support and you're left wondering if they value you at all.

I personally know a handful that bought from MI and the issue wasn't simply lack of due dilligence, it was creation of false leases, appearances of rehabs performed, rent checks that came in against no tenant placement, all which signal fraud (@Tyler Jahnke 's infamous post on BP).

Here is the specific language from Assembly Bill No. 68:a local agency, special district, or water corporation shall not require the applicant to install a new or separate utility connection directly between the accessory dwelling unit and the utility or impose a related connection fee or capacity charge, unless the accessory dwelling unit was constructed with a new single-family home.If the Planning Department is telling you that you need separate utilities and you're adding an ADU to a lot with an existing SFR, refer them to the above language from AB 68.

Is this site being watched by all the agencies out there?

While a single stall garage might be only a ~10k adjustment on an appraisal depending on your local market, the lack of garage can kill market value which is harder to predict.

You have certain resources, but lack others.  

I should explain that our little outfit has been investigated in the past by the federal government, due to our own stupidity, and so we also cooperate extensively with a few agencies today in our operations.

The lender has no duty to the 2nd borrower and vice versa and in fact, the lender may be negligent to regulatory agencies, examiners, investors, the U.S.