Actually, Propertunity,
..."Well that's how wrapping works. Low / no deposit, high payments, 2 - 3 years of good payment history from the buyer and they sell the mortgage to a mainstream lender and exit with profits"....
No, it isn't. What happens is, that after a while the 'buyer' wants to settle up the Terms Contract and finds that no mainstream lender will settle on a Terms Contract
And if the 'buyer' then asks the 'vendor' for a Mortgage Back, which under the Sale of Land Act they can do at any time, the Mortgage being for no more onerous terms than those described in the Terms Contract, the 'vendor' may very well seek to rescind the contract.
If the vendor has a mortgage over the property, which is very likely, then it is highly unlikely that they would be in a position to comply with the legal request of the buyer to convert the terms contract to a registered mortgage, as this would mean that they would have to satisfy the existing mortgage to enable the buyer to become the registered proprietor.
All that a buyer has to do is to have the money available for the usual Stamp Duties, government Fees & Charges and usual conveyancing fees. Legally, a vendor may not unreasonably refuse to convert the Terms Contract to a registered mortgage.
Terms contracts are legitimate, but the vendor must be in a position to be able to fulfil their legal obligations to the purchaser.
The provisions of the Sale of Land Act were never meant to be used for someone to trade in property.
Entering into a Terms Contract is very much Caveat Emptor (Buyer Beware) and can certainly lead to tears before bedtime. The tears being the unwary buyer.
Cheers
Kristine