I think im living proof that profit can still be made, even with little or no down payment.

Make sure you have properly served the notice and you have "Proof of Service" properly filled out. 

If you look at the majority of foreclosure cases where the Judges make them have to show proof, the banks either got caught forging and/or fabricating the documents or claimed the notes were lost.

We (developer and all of us as consultants) were sued over this PE three years later, which I mostly believe is because they realized they had no 'proof' of the PE beyond the fact that we had shot holes in their AP until they acquiesced to PE.

If they have no assets or if you don't have verifiable proof a lawsuit is worthless.

Erosion control has passed, and the permit is displaying "issued" status again, so that is resolved.On the lending side, I have signed for another extension. 

Perhaps you can provide a funds tracking and proof of funds to your investor.

If I provide proof that I didn’t know about the issue, I might not even get fined.

They may not be able to use financing contingencies and may have to show proof of funds equal to the acquisition price but the money that hits the sellers bank account is the same whether its "cash" or a financed transaction. 

Proof of downpayment and reserves (typically 12 months for a foreign national)4.