If the use you want is not permissible then, the it goes to the Zoning Board, a higher hurdle. 

“Permission” is not a “requirement”.

I was never given a "Letter to incur debt" from any bankruptcy trustee, either, so I assume that she was not given court permission to be indebted again.

If a lease states that no alterations are to be made to the property without written permission, is this grounds for eviction?

Now the loan language is pretty strong stating that no assignment or assumption of the loan may occur without permission from the lien holder.You taking on a 2nd lien holder position this close to trustee sale just means that when the 1st forecloses, your lien falls off, so you just discovered the quickest way to lose $19K.

As @Andrew Lawson pointed out, getting permission is pretty important.

Alternately, you could tell them they are permitted to do this now but that you may rescind permission later. 

Other custodians, like Quest IRA, will allow to invest in all the other permissible investment options, like real estate, etc.

We have permission to be in the rest of the house that is not closed off.Here is the 50 dollar asbestos question: is it a good idea to show the house with one room sealed off with plastic ?

I would wait for the Town's permission before moving someone in.