I gave him my detached opinion, it calmed him down, and he realized his actions would have been detrimental.  

If there is one thing that investors should value is the ability to approach any issue, with a healthy dose of patience and calm.

I have seen nails blown straight into/through plumbing lines, toilets that just about fell through the floor from caulked in water-fall-leaks, and all kinds of stupidity that made that "cheap guy" way WAY-expensive because of all the repairs needed to their "cheap" work. 

I own it now, loving my waterfall!

On the sale, though, if you were using an amortized loan then you will have recovered equity throughout your hold which should be included into your waterfall.

Seller is worried about future financial consequences I don't know enough about this sort of thing to calm the seller down.

My only advice (which im having a hard time taking) is to calm down and approach it logically.

This is very helpful, it calms my nerves a little also.

Know what, your right Juan, we are just hours away from the end of everything, all of us are just saying stuff is ok to keep everyone calm, it's really the end of it all, total collapse, your right, homes will go to $0, everyone's gonna get foreclosed, banks will go bankrupt, everyone will be laid off, no jobs will come back, stocks will drop 90%, you called it Juan, it is the end...... 

Like everything, things will calm down eventually.