More importantly, you have the Realtor-partner who will testify on your side.

I can testify to this :)

The tenants and my property manager appeared at the hearing (told my tenants they would be charged per the lease if they didn't show and were fined) and testified that it was not their vehicle and they had no idea whose it was.  

This tenant will give a statement and or testify if necessary but based on his actions of going to her can I file any kind of fraud case or criminal action against him?

The one thing in your favor is this issue didn't appear overnight and definitely took some time to build up so  any expert could prove and testify that this moreo then likely existed before closing.I replaced a sewer line a year ago in one of my rentals due to a bad belly in the sewer lateral.

If it gets to a trial, you'll have to have a "witness" from the Servicer, testifying about how the records have been kept by industry standard practices, pay,net histories, default letters,, etc, etc.  

I realize most investors can't "testify" or show up, but in doing so, if the equity is anywhere near limited and you want the note reinstated, you show that the market value, allowable expenses and repairs required at that value are limited to provide equity for other creditors.

I can personally testify that this move was one of the best lifestyle decisions I've ever made for myself and my family.

Unless the local rules require it, I would not involve a civil engineer except possibly to testify on your behalf (see next section).

I'm in Chattanooga, and I can testify that it is growing and has more REI potential than I'm seeing in larger metro areas.