We currently have a borrower with a home equity using their primary residence as collateral for loan. However, they have requested that we remove this lien and replace our collateral with an investment property that they own.

I am wondering if this can be done and if so, is the required documentation basically a transfer of collateral of some sort without changing any of the original loan doc's?

You should be able to do this as it appears to be a typical collateral substitution. The documentation needed may be based on some State law issues and you should seek the help of your attorney for the documents.