I don't think you have to be a lawyer to be very skeptical that this approach is exactly the slam-dunk win-win that its proponents believe it to be.  I discussed it with Robert briefly and he agreed that he did not think this was a good policy.

And it does not strike me as particularly fair, either.  Intervening lienholders lose out big time in this arrangement by losing a major point of leverage to collect their debts, despite claims of proponents that those lienholders are "no worse off" than they would have been without a refinance.  That's like saying that when you're in a line for a movie ticket, if someone buys a ticket at the front of the line and someone simultaneously cuts in front of you in line, you are no worse off because there are the same number of people in line in front of you before and after.  That's absurd!  You never get to the front of the line! 

And no, I do not think that the lienholders affected by this would like to sit back and take this quietly.