You'd have to look at the terms of your policy and your loan documents, or better yet, ask the bank what is their authority for holding the funds.

Am I incorrect and if so I would appreciate being directed to the authority.

Can't you get that information from your local housing authority?

One of the most important responsibilities of the title company is to identify the actual property owner(s) as well as who is/are authorized to execute the deed and other settlement docs.

I will put him into contact with a friend who is authorized to help with foreclosures, if the property is indeed in foreclosure.

The seller's credit will still be on the line and if the new buyer defaults on any payments you don't want the seller coming back to you.I would also contact the sellers bank - get the seller to authorize you on the account. 

You should definitely indicate somewhere on the lease who is authorized to reside on the property. 

The author used a type of software that allowed for posting on multiple sites. 

Any correspondence, we are assured the check is "in the mail" or, after disclosing that the military housing authority was now involved, that we would "have it today".

Assert your authority right away.