Subject prop. cash out refi - settlement to plaintiff?

[Erik Browning]

Haven't seen this before: the prelim shows an active suit, borrower wants to cash out an investment property to pay the settlement. Some proceeds to the settlement, some proceeds to the borrower. A NonQM lender of mine says they'd prefer not to mess with it, but this has to have happened before, right? Someone owes someone else, court ordered - they sell the house/do a cash out refi to pay the settlement.

What do you think is the best angle?