Here’s the entire question…
“A friend of mine is in a serious situation. She is strongly considering intentionally defaulting on her mortgage payments in order to be able to move out of her current State. What’s worse is that she is considering obtaining a cash-out refinance on her home before intentionally defaulting. What are the [...]

Cash Out Refinance Defined
A cash out refinance is when a borrower converts home equity to cash by refinancing with a new mortgage with a higher principal balance than the current mortgage in order to pocket the difference.
For example, your home is worth $300,000 and your current mortgage balance is $200,000. You can [...]

I would need additional information to give more specific advise on a cash-out refinance to pay for home improvement, but I’ll try without it.
First, a first mortgage cash-out refinance should most likely be avoided since the loan amount will be much bigger than the cash needed and therefore all the costs will be correspondingly bigger [...]

Let me reprint the whole question before answering.
“Mortgage just sold to another mortgage company. I have a 5/1 ARM set to adjust Nov 09. I have a HELOC with original loan company and I co-signed on a loan for my niece, bad I know. Mortgage at time of adjust should be 206,000, HELOC right now [...]