Question on Building Weath Buying Foreclosures by J. Schaub

I am currently reading the book Building Wealth Buying Foreclosures by John Schaub and on page 42 he includes a case study that I can't seem to follow the numbers on: 

Questions:

1. Why do the homeowners owe $280,000 if the purchase price was $200,000? I understand there is interest on the property but $80,000-worth seems high.

2. Furthermore, on the second page it says, "They have pulled out $80,000 in profit" which I don't understand. Where is the $80,000 in profit coming from? 

Thanks for the help!