A horrible and expensive solution in most cases.These are very simplified descriptions of court actions and missing a lot of variations.

A wraparound mortgage  - This is a variation of a seller second mortgage wherein  the seller remains obligated to pay the underlying first mortgage and continues to make payments on the first mortgage loan,and the buyer makes payments to the seller on a new mortgage loan that is subordinate to, and wraps around, the first mortgage.

"It'll just come visit one weekend a month" "It's not a pit it's a Staffordshire Terrier""He's the sweetest dog ever, crate trained, doesn't chew" (and variations of this, over and over)@Joel Owens it's a cultural statement and a pride thing.  

Are these people finding great deals, or do smaller markets and economies allow for rule variation?

We also follow a procedure similar to the one articulated by @Jon Holdman with the variation that we credit the application fee towards the security deposit of the successful applicant.

The island will be some type of Ipe or Walnut that has variations in color, like the one below. 

Add to that the different areas of the country these loans are made in, along with the many variations in a local economy, neighborhoods, etc. and they're bound to make some bad loans, without having someone on the ground do an inspection or an actual appraisal.

So some investors really would just like a lead and not an agreed contract if they feel they can negotiate a better deal than a birddog (most birddogs are new and not that good at negotiating a RE deal as they are learning).A variation that can work if there is a bit of trust....The spotter finds a hot prospect.

Certainly, I've seen variations, but the variations are upward and not downward.If your knowledgeable and willing to do the work yourself, you can earn back some of the expenses.

That's a deal I'll make any time.I couldn't put an exact number on how long it took or how much interest I saved, but within 10 years of starting this process I had paid off ALL OF THE RENTALS (including the 1/2 interest ones-3 of which had been purchased with cash initiallly) and had a postitive cash flow from REI of close to $10K/month.With that kind of cash flow you don't have to worry about variations in job status, loan qualification, or anything else.