In addition, this is unlikely to be worth the lawyers time to pursue in court.  

Many just think the loan is a write off at that point..The difference is when a SOL expires on the note, you can no longer pursue the borrower to collect on it nor get a deficiency judgment, however may be still be able to file for an In Rem foreclosure against the property. 

It's still a worthwhile goal that you should pursue, and I don't know your starting point.

@Summer Burke I would offer to cover the difference (as you mentioned) and then pursue recovering that amount plus any related costs from the contractor, via negligence claim if necessary.

You can pursue a judgement against the property owner for non performance under the loan agreement terms which would come up on a title report when they go to sell or refinance the property since a judgment search would be completed against the seller but that takes time and money.

Debtor must clearly phrase their request to obtain: the source of a debt and the amount a bad debt buyer paid for plaintiff’s debt; how amount sought was calculated; where in issue a list of reports to credit bureaus; and documents conferring authority on third party to collect debt.Documentation of the creation of the debt with your collection agency.Under FDCPA Section 809 (b), you are not allowed to pursue collection activity until the debt is validated.

Maybe just say you will pursue legal action if the situation isn't immediately addressed.

They have no option but to pursue legal action as the agents have also not been paid but are there to guide this seller because they've agreed to work together.

If you decide to pursue REPS, creating a detailed time log of all rental activities is essential.

Your own diligence is telling you this is not a deal to pursue.