Additionally, item (2) in the estoppel states that the existing lease is maintained in full force, and the tenant write "N/A" to any modification, exceptions, etc...Its my understanding I'm required to uphold the lease terms.Any advise is helpful!

The second exit strategy you can do is reinstate the first in foreclosure as @Bob Estler mentions above (which goes to show how important due diligence is with rent rates on dangerous loans) since your 2nd is "Paid off" you can see if you have the rent rates cover the cost of the mortgage and maybe hope that the 1st lien holder will be able to do a modification to reduce the monthly liability since the property is upside down.  

So, you might consider a modification before you sell it.Always ask if the borrower can pay it off somehow, if they can save money, they might find that long lost aunt to help....never know!

Two special rights extended to disable 1) the right to make reasonable modifications to dwelling to enable them to live there comfortably, and 2) the responsibility of management to make reasonable accommodations.

Landlord encourages Tenant to make the dwelling "their own home" and will allow a certain amount of decorating and modifications.

That might require a new tenant, some modifications to the unit, or more.

According to these Federal reports, 70% of loan modifications are turned down by servicers and of the 30% that make it to HAMP,..an estimated 1 of 3 fall-out.

Should be able to use a term lease with minor modifications. 

As a disclaimer, I"m not an attorney and you should get one for any contract drafting, including lease agreements or modifications. 

It may be as simple as "My boss told me to do so", or it could be a list of issues you and/or your organization have been facing that necessitated it.Sometimes you attend a meeting or conference in response to an advertisement you came across.