I'm assuming the insurance company wants to pay put the least amount possible.

If you have a traditional Canadian bank mortgage, you can pay that mortgage off early, there is just usually a prepayment penalty of 3 months interest.

In CA, that also means you're paying an additional $800 franchise tax fee per year.

I understand that this is a big ask, and I'm not interested in pay.

You simply establish such a plan through working with a professional plan provider, CPA, tax attorney, etc.  

Unfortunately, the tenants have stopped paying rent and I need to evict.

Therefore, since this loan will end up sitting on the lender's balance sheet, you should be prepared to pay an interest rate that would make sense for that lender to have their money tied up without earning the additional income they would earn from selling their loans at a premium on the secondary market and being able to re-lend and keep flipping the money. 

What I know about this house is that there should be no mortgage (messaged realtor to verify), last sold for $60k in 2004.Rent in my area; $1,200 is usually pushing it but doable.https://www.realtor.com/realestateandhomes-detail/200-Walnut...At the end of the day, I love the idea of seller financing but I have many more questions when it comes to different types of properties that might be mortgaged and how does one pay the monthly payments on top of paying the equity to the seller at the same time.

Start by learning the real estate basics, study the market, set your goals, get a team of experts, make friends in the field, look into how to pay for it, begin small then grow, do deep checks, and go for it.

This affords the opportunity for a homeowner to sell the property if it is not under water for market value and pay off the loan before they are foreclosed upon, or more commonly, short sale the property with the bank's approval.