EthicsQuestion 322 of 400
A buyer and seller agree that the seller will secretly lend the buyer the down payment through an undisclosed second loan, hidden from the primary lender. This is:
a.Mortgage fraud (a silent second / undisclosed liability)
b.A permitted seller concession
c.A standard gift of equity
d.A required government down-payment program
Explanation
A hidden second loan used for the down payment that is concealed from the primary lender is a 'silent second,' a form of mortgage fraud through material misrepresentation. A disclosed seller concession, a documented gift of equity, and a legitimate down-payment program are all transparent and lawful, unlike a concealed debt.
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