Finance
A Mississippi seller carries back a second mortgage to help a buyer finance the purchase. Which of the following is TRUE about this arrangement?
AThe first mortgage lender does not need to know about the seller-carry second
BThe first mortgage lender must typically be aware of and approve any seller-carry financing✓ Correct
CSeller financing is prohibited under federal law
DThe seller's second mortgage automatically has priority over the first mortgage
Explanation
Most first mortgage lenders require disclosure of any secondary financing. Undisclosed secondary financing may constitute mortgage fraud. The first mortgage lender must be aware of and typically approve any seller carryback second mortgage.
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