Adding or removing borrowers
A refinance can sometimes remove or add a borrower, but the agencies require a legitimate ownership/obligation path.
Freddie baseline
When an existing mortgage is being satisfied, Freddie generally requires at least one borrower on the new refinance mortgage to also be a borrower on the mortgage being refinanced.
Freddie exceptions
Freddie permits exceptions when a new borrower has held title, occupied the property as a primary residence and made timely mortgage payments for the prior 12 months, or when the borrower inherited or was legally awarded the property.
Fannie
Fannie's refinance rules likewise contain borrower/title requirements and special treatment for owner buyouts, inheritance, divorce and legal awards.
Official guide baseline
Fannie Mae Selling Guide · Freddie Mac Seller/Servicer Guide
Refinance classification matters. A transaction that falls outside limited/no-cash-out rules may become cash-out even when the borrower receives little or no cash personally.