Additional BackgroundContractor says there is a lot of "unknowns" in the project.

Guidelines from Fannie Mae:-Calculation of Reserves for Multiple Financed PropertiesIf the borrower owns other financed properties (determined in accordance with B2-2-03, Multiple Financed Properties for the Same Borrower), additional reserves must be calculated and documented for financed properties other than the subject property and the borrower’s principal residence.

it seems like the partner with the mortgage is taking on additional risk and not allowing him/herself the opportunity to finance other deals in their name.

 So on a deal like this I asked myself how good is the deal for the additional risk.

Additionally, if the debtor changes jobs, you'll have to go through the garnishment process again.

Exactly - in addition, you're going to have to lay everything out on the table for the professionals you ask.  

Additionally, if you are looking for guidance when it comes to REI, I am your guy, you can PM me any questions that you have, I would love to help you out.

We put all occupants of legal age on the lease for the reason of additional parties to encumber if needed.

IE sorry the deal didnt go through, heres a little something to help defray your additional holding costs. 

Best case scenario if the figure out a way to shave off a part of the deck.Worst case scenario the neighbor tells you off and at that point you should get some legal advice and exercise what ever right you do have.