What you describe is a horrible nightmare. I suggest you retain a real estate litigator immediate. You are probably going to need several lawsuits...

Your mortgage servicer did not induce you to default. You did that all on your own, and you should have remained current until you had a new deal...

I assume you owe the EDD for receiving overpayment of unemployment benefits. If so, stop ignoring them. They won't go away. Call them up and...

You may already be in the clear. The statute of limitations in civil court for stealing, (called "conversion") is 3 years. As soon as it has been...

Frankly you have been going about this the wrong way. A credit report does not effect a debt that you owe, no matter what the report says....

His lawyer has the file and is in the best position to give advice.

My answer is "maybe." If you have any late payments, those are damaging her credit and may be a sufficient basis for her to take the car back.

Yes, you can sue them. Small claims court would be perfect.

Being one day late is all it takes.

From what you said, it sure sounds to me like you can sue them.