For a realtor, give them a property address and ask them to prepare a market analysis for you with comps, and point out the deficiencies and positives regarding the property.

Like your tenant wrecking the place.Even if you do a short or let it go into foreclosure you will likely get a 1099 for then forgiven debt or a deficiency judgment.

A lender is not able to sue you for any deficiency judgement.

If they want to keep it from foreclosure and keep from being sued for the deficiency, take the deal and close the loan...Just my two cents.

In order to pass the inspection, all of the identified deficiencies need to be corrected. 

I am not familiar with New York but many states require "disclosure statements" by the owner stating any know deficiencies in the property, i.e. mold, roof leaks, insurance claims.An estoppel will give you lots of the information you seek and you can make it a part of the contract.  

The alternative is for the 2nd to say "no" and for the 1st to say "ok, I will take the property to foreclosure to collect as much as I can and you, Mr. 2nd position can have whatever is left over, if anything.The subordination and loan modification "rewrite the agreements", thusly the new order and the new dates.The lis pendens means there was a lawsuit.The judgment filed in Jan 2017 looks like the borrower lost the suit and owes $84,905.88That can mean that there was a deficiency judgment on the sale of the property.

It sounds like the homeowner wants to be able to walk away without any hit to their credit and without any potential tax or deficiency concerns.

I suppose they think they can go after a deficiency judgment on the balance, but that's not real smart nor good banking practice. 

Deficiency depends on more than one factor.