Interesting.  I'm not sure what the legal answer is to this question, but one of my questions is just who would be in charge of enforcement.   Could it also be possible in your situation that the buyer was using the house as additional collateral for another reason?  Two weeks ago I recorded a deed for nominal consideration out of a realty trust to two individual homeowners, & then recorded a mortgage for about 20 times what the property was worth.  This was part of a blanket deal to finance a bunch of real estate transactions in other counties.  Do the closing attornies have a part to play in all of this?  Lying is lying after all & they probably wouldn't want to be party to fraud.  I also wonder how banks would be able to justify lending 400K to someone with a house "worth" 295K over & over & over again.  Don't they have to report these kinds of bad ltv ratios to someone?  Let me know what you think.