The fair market value of a $200k mortgage will not be $200k, I think they could get the "fair market value" in there at one point. You seem to know a lot more

The fair market value of a $200k mortgage will not be $200k, I think they could get the "fair market value" in there at one point. You seem to know a lot more about this situation than I do though, and from your other points it does seem fishy.