Seller-finance (are they wraparound mortgages?)

[Ty McAllister]

Hey there! I see a lot of seller-financed properties as I'm practicing running numbers on properties listed on craigslist & other similar sites. I suspect that many of these homes are not owned outright.

Is it common for people to do seller-financing on their homes as a wraparound mortgage? It's been my understanding from the research/coursework I've done that this is almost certainly against their primary mortgage's terms.

How common is it for banks to call loans in these situations & how safe is it for people to offer seller-financing in these situations? What kind of precautions do people take in offering a wraparound mortgage?