If you are lending, then it would be in your best interest to be added as a mortgagee on the policy.I hope these things make sense how I am describing them but I would also recommend getting with some type of an advisor/instructor on these techniques.

Include an explanation to be added to the report in the event the bank denies the dispute. 

Additionally, any lender worth their salt should be adding back depreciation as it is a non cash expense. 

For example, I might say that "we will agree that your taxes to the date of settlement will be credited to the amounts I will owe you toward the sale price" or "your rent is due on the first and a late fee will be added after three business days".

Basically allowing subordinate liens to be added in after the fact on the original foreclosure case in order to close them out.

Seems like he is of the opinion it should be added to the basis of the property and depreciated over 27.5 years along with the rest of the building. 

That might work out since I only have one SFR at the moment but will be adding a small Multi-Family by the end of the year.I appreciate the insight.

That clause is great and I'll be adding something similar to our contract. 

If it isn't what rider should be added so that it is covered.

Also includes a small 1x1 suite that could be added to either side or used independently to generate further income.