The tenant didn't cause the issue by an intentional or negligent act.

My math puts me at pulling $390k out through the cash out refi, with a new higher mortgage payment of about $1650 (to me though this is negligible relative to the equity I can put to better use on a value add investment property).Is there something I'm missing?

When they ask what the issue is you reply the endangering residents is bad enough but then trying to extort an injured tenant harmed in their managed property due to their negligence, wow that's bad BUT then to work to cover it up..... well I'd just hope Ellison is pro-PM and anti tenant, oh yeah, not so much huh.

Hunting for 25bps in rate is negligible and I would go with the lower cost loan as opposed to the lowest interest rate (especially in lower loan amounts since the rate doesn't impact P&I payment as much anyway). 

The primary issue is the lender is repeatedly negligent about paying taxes and insurance from the escrow they're collecting with the mortgage payments.

@An Duong it's really up to you whether it's a good enough deal for you to agree to that.I will say, besides the two years of below-market rent, you should also factor the cost of an eviction into your thinking.It may not end with an eviction, and if it doesn't then you'll have saved some money, but I would go into it with the assumption you'll have to do one since I think there's a non-negligible chance of that.In a negotiation, sometimes it can be helpful to try to figure out the other person's motivations and find other ways to meet it.For example, if he's worried about being able to afford market rent, then if it's $200 below market a month, and you don't want to tie the unit up for a second year, maybe you offer to pay $2400 more at closing and only have him there for one year.If he really likes the area, maybe you find him an apartment in the area and offer to pay his security deposit, a moving company, and X months of rent to get him started.

I'm on the fence about contacting a lawyer, just because I don't know if I should be going after the HOA for the work to be completed due to their negligence with the initial inspection that was supposed to be done before possession, or the builder who was supposed to complete the work regardless. 

We work as missionaries showing very low income in my name and a negligible amount in wife's name. 

You can also request this information from the board as it's your right, but since they aren't responding, document it and report to the town. you can also provide proof of payment from your end as well and provide evidence you made the request and they haven't been responding. last option, get an attorney to send a letter and then lawsuit since their negligence is preventing you from refinancing and save money. 

The penalties for even non-negligent non-compliance for the esoteric filing obligations you'll encounter as an expat are steep.