The prospective tenant has several requests for accommodation and modifications to the lease.

If there was any genuine fraud, the borrower should have definitive proof of this and can find remedy through the legal system, if there was any.The other thing your neighbor could do is to request a loan modification, if that would change his mind regarding letting the property go.

I would suggest applying for a loan modification, even if you don't end up qualifying the process is stalled during the review period. 

Relisting with Different Specs: The property being relisted as a 4br-2b could indicate a discrepancy in the listing or recent modifications.

Is there a formal lease modification form?  

Have you tried to get a loan modification?

The house is unique and with the modification done ( interior) to it makes it stand out from other houses in the area.  

My first article "Google Analytics for Loan Modification Websites" is a approved one http://www.biggerpockets.com/articles/954-google-analytics-for-loan-modification-websites while the recent one which i wrote next "Designing Google Adwords Campaign for Loan Modification Websites" is unapproved.

I am also a manager of people and have studied a variety of ways to deal with people in conflict, behaviour modification, and expressing difficult ideas clearly without creating conflict.Should any of these things be of need to you, feel free to reach out and I'll do me best t lend a hand. 

The third I believe is loan modification.