Sub2 sale when mortgage has been discharged in BK?

[Matthew Hall]

If a seller's mortgage has been discharged via CH7 BK and they sell the home subject to existing financing and sign the title over to the buyer, how would this be viewed by underwriters when they try to get a new loan? Normally with a sub2 transaction the seller would still be on the hook for the mortgage even though the home is out of their name, but in this case there is no mortgage, only the lien. Seller stayed current on the payments through the BK but never reaffirmed and is current to this day. They are outside of the seasoning periods for FHA and have the income to qualify for a mortgage, but not while carrying the current property. They just want out in order to relocate for a job change.