Finance
A Connecticut seller agrees to carry back a $50,000 second mortgage to help the buyer close the transaction. The seller must ensure that this arrangement is disclosed to:
AOnly the buyer
BThe buyer and the first mortgage lender, as undisclosed seller financing can constitute mortgage fraud✓ Correct
COnly the title company
DThe Connecticut Real Estate Commission
Explanation
All financing arrangements, including seller-carried second mortgages, must be disclosed to all lenders involved in the transaction. Failure to disclose seller financing to the first mortgage lender on the loan application constitutes mortgage fraud.
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