Contracts
Under Arizona law, an agreement between a buyer and seller to reduce the stated purchase price on a sales contract while a separate undisclosed payment is made to the seller is:
AA common negotiating practice
BMortgage fraud through misrepresentation to the lender✓ Correct
CLegal if the lender is not involved in the transaction
DPermissible if both parties agree
Explanation
Any scheme to misrepresent the true purchase price on a loan document—whether through kickbacks, side agreements, or price manipulation—constitutes mortgage fraud, a federal crime with serious criminal and civil consequences.
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