(It would also make me wonder the creditworthiness of  someone that would have to borrow at those rates, but that is just learned bias!)

For creditworthy people, often they do FHA because it's easier for the lender to get an FHA loan through than Fannie, even though 5% down Fannie is objectively a better deal (ie, lazy lenders).

Hard money lenders look at borrower's credit worthiness / Experience and evaluate if the deal is worth the risk.

Seasoning the note as I understand is the allowing of time for the buyer to make timely payments to show the note buyer the credit worthiness of the person selected to purchase the house.

Of course you would have to be credit worthy in order to be able to make that guarantee.

Nope the bank can loan out more than it has in deposits so all it must concern itself with is creditworthiness and its own criteria.I never claimed that the US as a superpower had anything to do with the operations of a fiat monetary system.

There are credit break points, such as 750 and 720, that have a significant effect on your creditworthiness.

What happens to the "guarantee" of the policy when the insurer proves to be un-creditworthy and pulls an AIG?

Should the property owner not redeem in the time period allowed (again varies by state) then you now own the property and you can now rent, sell or otherwise do as you see fit.If you are just looking to sit back and collect interest payments without the headachs of owning property then, you want to buy first position notes secured by contracts that have good pay histories, equity and credit worthy payers.

I would say this, a car note if you are credit worthy (no bad credit issues) shouldn't be that expensive.