I also looked through the monthly letters that he's sending with the updates and they are basically the same (March & Feb are identical).

You need to avoid certain high risk features, which include balloon payments within 5 years, excessive fees, validate that the borrower has the ability to repay the loan, make sure they are likely to repay the loan based on their credit history, excessive late fees, long loan terms, etc, etc. 

We understand that not every lender will provide us with a commitment letter due to risks outside of our control (the market, covid, the borrower, etc).

I as a lender as part of settlement had our servicer unwind some negative reporting.As a sidenote I saw a post online somewhere else where someone who had an owner occupied home for several years relocated for work and teh servicer sent a letter telling them they are not in compliance with their loan because it must be owner occupied for the entirety of the loan even though the loan docs say one year....Again, servicer overstepping their bounds

Hi Sarah, we just sent a notification letter to them to end the contract after 2 years and no realistic date of ending.

It will include an approval letter from the IRS.

I don't know NY law, but in AZ, you may send two certified letters. 

This means I get a ton of applications but Zillow also makes it easy to deny and sends them the denial letter which is fantastic in my opinion.

Letters are a good start.

Look at it this way, would you rather have 6% interest only over 4 years with a balloon or 8% amortized loan pay back.