Years ago (like 30)

I used to work for a mortgage company in the Los Angeles area. We made second mortgages. Firsts were going for about 13 – 14% and our seconds were 18 – 21% depending on the borrower’s credit rating.
We had one investor (that’s where we got the money to loan) who would save up all his monthly payment checks (borrowers paid us directly and we dispersed to the investors) until he had the appropriate amount for his next investment. My boss would call this guy and tell him he had a good loan for $xx,xxx dollars and this investor would bring in $xx,xxxx in payment checks (from us) to fund the next loan he was funding. Odd business that was. (I think a lot of investors, and my boss, really would rather foreclose because they’d be second in line to purchase the properties, but that’s another matter.) If the checks were over 6 months old, we’d do some fancy bookkeeping and reissue the funds to him so he could buy the loans. (I’m sure glad I wasn’t responsible for those checkbooks. I did the escrow books, general business books, and payroll. Others did the rental property books and the mortgage payments.)
I loved that job because I regularly got deposits in excess of $100,000 and then got to disperse the funds the next day. I loved balancing my books there.

One more note:

since you are paying the mortgage 1/2 out of each check—-make sure you put it somewhere it can’t be touched while waiting for the other check—or that could cause some big problems.

I am just mentioning this because I know if my sister were to do this—her and hubby would have issues–as they tend to say “oh we have money–we will just put it back next check”.

Except that in the cases I’m familiar with, it is in the buyer’s name

The deeds were registered with the county clerk with both the buyer and the seller listed, just as with a mortgage. So the property was already in the process of being sold. The only thing that would nullify the contract was if one person or another went into default, and then the “wronged” party would have the option to decide how to proceed. Usually, even those options were spelled out. So the only way it could be sold out from under the buyer, is if the buyer were in default. The family couldn’t just decide they wanted more money, or wanted it sooner. It was a legal binding contract. I wonder if that sort of thing varies from state to state though. Maybe that’s the difference. Something to definitely check into……