., a CDS - collateralized debt swap), the money will end up in the hands of the purchases of that bad debt.

They get the collateral.

In those cases I now own the property, it's not just holding collateral for liquidation.

He has no cash on hand for the repairs, and no other investment properties to use as collateral to get cash out.He needs $10K for repairs to get it rented again.

But I doubt you could sell the property tomorrow and make 60k.. so yes the mid west is the land of the investor will limited resources no collateral and wants to get in the game nothing wrong with that..

The only thing that would have to be investigated is the asset being used as collateral.

Me thinks at this stage of the game that there are some global rational minds that will rise up and declare a kind of global blanket bankruptcy of sorts, wipe the slate clean and start this whole global economic thing from scratch with an internationally accepted currency based on some form of real collateral be it GOLD or KRIPTONITE from an alien source. 

You give a seller a lien on your 40' Gemini catamaran as collateral in a seller financed purchase.

Again, can't speak for Granite, but if you are a large asset manager with diverse pool of collateral, there are a lot of very cheap financing options available to you in the market these days.

On the risk associated with Second position notes when there is any issues in the collateral those get wiped out as quick as they were created.. there are simply to many good first TD's that return 12% to even consider risking investing in that kind of deal... the risk reward simply is not there in IMHO.... you can align with a great HML in your market and make 12% every day of the week all first position etc etc... for the life of me I can't understand how people would take a risk in second positions only to make 12%.. regardless of the stature of the company..