Actually, the loan company doesn't care much about whether or not you plan to live in a house, although they prefer that you do, but you are not allowed to borrow the downpayment. That is the lie that matters. If they don't see where he took that money from his own funds, then he will need a gift letter from the parents saying that the money is not a loan, it is a gift and they will never ask for it back.
I think the mother feels guilty about the whole thing, how messed up her son is. She probably thinks it is because she left the family when he was young, and he never got over it. My oldest son is adopted. We got him at birth. But he never stopped testing us to see how bad a kid had to be to get his mother to give him away. There were so many times I wanted to renounce him and say, "I'm not your mother, and I don't want to be your mother anymore." But I never did it. It is not often in my life that I have managed to hold my tongue when really angry. But deep down I knew he was damaged by an accident of birth, and I could never heal the hurt in him.
