1st, you need a local lawyer. then 2nd, you need a lawyer. So, respectfully PLEASE GO FIND LOCAL COUNSEL. You cannot do this by yourself.
As to the home, without having seen any of the loan agreements, I'm sure there's some provision in the loan agreement(s) that if the property is condemned, the loan becomes due. I'm sure once notified, the loan company will begin foreclosure proceedings, regardless whether monthly payments are being made.
If he has a small pension and social security (but little or no savings) he is probably eligible for some senior house, BUT, there is probably a delay/wait for it. If he's mobile, try 2nd or 3rd story senior housing apts... generally less of a wait.
As for him not being cooperative, you could apply for an involuntary conservatorship. Although courts are reluctant to grant these, the fact that he was living in squalor could suffice to indicate that he cannot live by himself and can't take responsibililty for himself. At worst, ask for a limited conservatorship over the person, not the finances... Thus,you can control his person and he'll still have control of whatever limited finances he has. I would suggest you ask the court to allow enough funds to pay for an assisted living community.
AGAIN, GO SEE A LOCAL ELDER LAW ATTORNEY
I agree with Attorney Stillman. Without reviewing the loan documents, it is difficult to determine what procedures the lender will follow once the home is condemned. It is likely that he (or you /your spouse) will need to notify the lender of the impending condemnation. Given the dire circumstances of his housing situation, your father-in-law’s lack of cooperation could be an indication that he is suffering from dementia and/or that he is no longer able to make financial decisions on his own. A conservatorship may be the most appropriate way for you and your spouse to handle this situation. A conservatorship of the person and/or the estate will allow you/your spouse to contact the lender, deal with any other financial or health care issues your father-in-law has and arrange for his senior housing. Although you are located in Berkeley, and assuming that your father-in-law is still in San Diego, you and/or your spouse can still qualify as your father-in-law’s conservator or conservators. You should discuss this with an elder law attorney. I am located in San Diego and would be happy to discuss this further with you.
Disclaimer: The above answer does not create an attorney/client relationship. My responses are intended to provide general information about the question posted. I am licensed to practice in the state of California. The information provided on this site should not be used as a substitute for conferring with or hiring a competent legal advice from a licensed attorney that practices in the subject area in your state.