Contractor pay client debts
Is it legal for a licensed building contractor to offer to pay off some debts for a customer and then add that amount to the mortgage loan (he's working with a mortgage broker). For example, the customer has $2000 in bad debt that is preventing her from qualifying for a mortgage loan. The house the contractor is building will cost $80,000. Is it okay for the contractor to pay her bill and then charge her $82000 for the hosue. I'm a little concerned about this.
Thanks so much for your help.