Wraps of existing loans not Sub2

[Chris DeSisto]

Example: Say there is a distressed seller and they have a loan on a house that is 190k and it is worth 205k If you were to wrap their existing loan with a contract for deed for what they owe, 190k and the same interest rate (say 5%), $1300 monthly PITI but instead of the term being 27 years you have a balloon for 5 years. This gets the seller out sooner than if you took it sub2 and wrapped it.

Now as far as dodd-frank and balloons goes I know you can't use them if you are selling your own properties 3+ per year. But what happens when I get it under contract with a purchase agreement from the seller (like a wholesale deal)  and you agree to pay them say 3k at closing. What if you go out and find an end buyer and they are actually going to live in the property. They agree to pay 203k for the prop with 13k down. You give the seller 3k and you keep the 10k. Now if I assign the contract off to the buyer is this technically a sale between the seller and the buyer, so a balloon could be used? My understanding is that a person selling one house per year can sell with a balloon and not even verify if they can pay the loan back, under dodd-frank. Now if I were to do this I would still get them involved with a RMLO to make sure they could pay even if technically you wouldn't need to, assuming that in this situation the seller is selling directly to the end buyer. The investor is in and out of the deal like a wholesale. 

Also, if the title is not transferring until the CFD is paid off, does this trigger the due on sale clause? Leaving the insurance in place and have the new buyer get their own insurance. Thoughts?