I am sorry for your loss. I do not know your market so please take this advice with a grain or two of salt.
A wise attorney told me, "there is more than one way to skin a cat" and he was right then, as he is now.
First, in the sale of a property (at least in California) is a document called a Natural Hazard Disclosure Statement. This discloses all known faults and issues associated with the property. Whomever was responsible for developing the property (meaning bedore there was a house there, there was dirt. Who developed the dirtl did the grading, the soild analysis, etc.? Somebody did, and that somebody has errors and omissions insurance.
Second, the fact the your home is no longer inhabitable (meaning that the govering agency has pulled the occupancy permit) is significant. In order for an occupancy permit, certain criteria must be met. If the home is not habitable, then somebody is at fault somewhere. It is not as though you decided not to pay the rent, or you decided to make the property uninhabitable.
So, my recommendation is to talk with more attorneys. Somebody will want to take your case (IMHO). Also, are any othe homes affected? Go down to the city engineer, talk with the dept. of neigbhorhood services, right letters to the mayor, city council, county board of supervisors.
The only way you lose is if you don't do anything. SO DO SOMETHING. DO IT LONG ENOUGH, THEN SOMEONE WILL NOTICE.