I'd be more concerned with that because if he runs out of money half way (or even less) you're going to be in a real bad spot... and likely not be able to recover anything worthwhile. 

Any money "saved" is sometimes recovered later in a lawsuit.

The feeling in the basin is that there are more jobs this year than last year and that it is starting to slowly recover. 

Now late pays are bad enough, but the time frame to recover is much shorter than a fully completed foreclosure. 

(We wanted to sell when we moved out of the state, but couldn't until the market recovered)  We made it work and it was successful enough to cover all our costs and mortgage, but we were not making any money.  

The upstairs is rented for 250 per month (I think it's a fair price based on condition, layout, and size) and I'm considering making covered stairs but that will cost a few grand and take some time to recover. 

One brother is in jail for 15-life, the other is recovering from heroin addiction. 

Usually there's a "recovering CPA" in the room. 

Questions: 1) Can they cash-out on refi on long-term mortgage to recover cash/cc debt?

The banks price them high enough to recover costs involved in the foreclosure every time.