He's saying that the property, if sold, goes as is, where is and that if the owner has personal liability that such will likely be released when the BK is discharged or finalized.

Question 1:   Can we get the lien that was rolled into the original loan released now as it is covered by the existing $160K loan?

(penalties, schedule, release of lien...?)

I have been a member of Bigger Pockets for about a year now but I'm re-releasing myself to the wild because I've recently moved down south to East Tennessee.  

No lender is going to throw up their arms and declare they abandoned a mortgage and file a deed of release, they do not have to admit they messed up.

@Nat Chan  it kind of goes with the territory of doing remodel rehabs on the cheap or as cheap as you can get them done.When we build new contruction no ONE gets a dime up front for anything... we get an invoice on the 1st for the preceeding months work.. we pay on the 10th.. and we get lien release with payment. 

I didn't read all of the post here but yes, it is totally normal for the sellers to want an accepted contract or at least an LOI before releasing this info.

The SEC has finally released rules for Title III of the JOBS Act, the equity crowdfunding law. 

FYI and depending on the title company they may want a release, if so you can send on the case law to them to get them to insure or change title companies.

If Scenario Two is agreed to--then I would hire a college student to help me with a press release and marketing campaign.