Legality of "Split Approvals"

[B. P.]

Has anyone worked a "Split Approval"? I am researching details for friends going thru the Short Sale process in Florida. Forgive me as some of the terms are unfamiliar to me. The 1st (GMAC) has agreed to give a portion of Sale funds to 2nd (Bank of America / Green Tree). The 2nd wants more than the 1st is offering & telling my friends to come up with more money _and_ to wire it OUTside of Closing as a "Principle Reduction" (?) _before_ 2nd will provide an "Approval Letter". This sounds illegal (at worst) but questionable (at best) as the money isn't going thru Closing. Another person suggested 'extortion' (which seems quite strong) ... deal is, these folks could really use some sound advice as they do NOT have the money to spare in a questionable transaction and I have no experience in this area. Thanks for your understanding and prompt replies.