I'm not understanding the logic behind putting 60% down. Assuming they get a mortgage rate of 4-5%, they could have put 20% down and invested the rest in the market. They would typically earn 8 - 12% on the remaining $500k and be well ahead of the game; and "all of the money they had" wouldn't be tied up into the non-liquid asset (or lost to a scam). Sure the monthly payment is higher, but they'd have the cash and gains to more than cover it.
This is why even wealthy people have mortgages. Mortgage rates are typically lower than the rate of return on investments.