In response to your second question, no I've never come across this before but needless to say...not surprised by this behavior. Again, I still would not agree to it and did he ask you himself or through his agent which is really unethical, illegal and inappropriate, amongst other things to say the very least. My advice would be to walk away and not take part in his illegal scam. I wonder if he will still think that holding out for $10,000 cash is a better deal when the bank forecloses on his house.
Bottom line is that some sucker may agree to it but don't let it be you.
Thanks for the "best answer"!
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