When this is done you can write a great blog post to inform others.  

This is full disclosure and will tell my side as best I can without writing a book. 

I plan on writing a formal letter to the board of selectmen and the building inspector but anyone know what else we can do to report this guy?  

If both of those are the case, then get a lender that can write 20% down on the conventional loan.  

Personally I think the headache of having a board and having to have annual meetings might be enough to turn me off of the corporation but then again if done correctly and documented properly and you had enough money to do so you and your spouse could hold the annual meeting in the Bahamas and it would be a write off I believe.

I can't see a lender allowing you to have a loan and then sell half of their collateral.You may be able to write some sort of agreement with a family member and pocket the cash, but the lender won't honor your agreement.

If not (which is most likely), send the file to collections and write it off.

You should write a book brother.A beating is what this guy needs. 

Full disclosure - I'm a Real Estate Broker with 30 years experience so I'm writing this from a Realtor's perspective.A lot of wholesalers I have met have a mix of experience. 

Like make 3 requests in writing and if nothing, just move on.