Question about land

[Matt Ellis]

I had a friend call me and ask about purchasing some land from someone he knew. He said the land is worth $100K. He said he we went to the and got approved for a 40K loan on part of the land  ( i guest it is sectioned off)and the owner wants to do a separate contract for another $20k ( his profit). Now my friend wants to do it but does not know if it illegal to have a contract with the bank and a separate one with the owner as well. I really didnt know what to say....can anyone help?