You can reference NeighborhoodScout to see the major California coastal cities are each 10/10 for this century.  

They just put there head in the sand hoping it would go away!!

Then, I would file the letter in the filing cabinet and on the 60th day I'd call the lawyer to nicely tell the buyer to "go pound sand".Now, in the very unlikely event they file a lawsuit, keep in mind that will cost the complainant about $25,000 or more and eventually you'll hire a lawyer and that costs you a few thousand, which is covered by your umbrella insurance.

I shake sand out of the clothes outside.

@Brad Sand - Thanks for talking through the different angles.

The coastal cities all have historical high rents. 

Quote from @Brad Sand: Appraisers (I am one) are going to classify the house for condition and quality.

If rate was in 7's and no pts I'd maybe let it slide, but add in the pts, it's a "WTF" moment. 

Similarly, all subordinate lenders would be wise to contact the senior lender(s) and agree to keep each other informed of any adverse loan status.

Admitting it (to yourself really) is the first step and so many people choose the ostrich method instead of sticking their head in the sand and waiting for things to improve around them.