From what I see (I checked two different systems) Here's what it looks like.  3/21 the loan was sold to another back, less than 30 days later they issued foreclosure notice, then in 6/21 they refinanced.  

The claim is that you get this money back less the $650 charge for inspection and appraisal.

I called back less than an hour later and they had already called one to come by stating I took too long to respond. . . 

I offered to fog the place with a bed bug fogger and if that did not satisfy them I'd refund their first and last as well as deposit less any damages if they moved out tomorrow, otherwise they could consider this their 20 days notice to move out before the end of the month and receive their last months rent and deposit back less any damages.

The Trust account is set up to be paid to you in event of default on the lease and successful judgment obtained in court, or at the end of tenancy if the tenant leaves owing no money then they receive the full balance back, less any fees for Trust account maintenance.If that doesn't work, how about co-signers? 

Question for any lender/underwriter:If someone is getting a conventional loan, (borrowing 80% for example) if the appraisal comes back less than the contracted price, but hits at least the 80% mark would this get approved by underwriting? 

We overcharge on an appraisal to make sure we are in compliance with disclosing, if it comes back less then you will just get the difference back.

https://www.theguardian.com/money/2019/aug/13/danish-bank-launches-worlds-first-negative-interest-rate-mortgageHere’s an excerpt:A Danish bank has launched the world’s first negative interest rate mortgage – handing out loans to homeowners where the charge is minus 0.5% a year.Negative interest rates effectively mean that a bank pays a borrower to take money off their hands, so they pay back less than they have been loaned.Jyske Bank, Denmark’s third largest, has begun offering borrowers a 10-year deal at -0.5%, while another Danish bank, Nordea, says it will begin offering 20-year fixed-rate deals at 0% and a 30-year mortgage at 0.5%.Under its negative mortgage, Jyske said borrowers will make a monthly repayment as usual – but the amount still outstanding will be reduced each month by more than the borrower has paid.

At this point I told the lender that we couldn't do a deal and requested my deposit back less the appraisal cost.

You would get some of your money back, less some fees.