The incentives here are so perverse that it puzzles me that they could be legal. Consider the used car market, which has gone through this type of "financing". Seller prefer for buyers to default, because they can collect, say, 20% of the car's value, then resell it at maybe 5-10% depreciation, rinse and repeat. The sums that some dealers can collect on a single, shitty old car can be many times what the car is actually worth. Now consider the same with housing, but with the "bonus" (from the seller's perspective) that houses don't always depreciate. Some do, while others gain astronomical value. If, for example, a neighborhood gentrifies, that $30,000 house could be worth $300,000. Does anyone think in such case that the "homeowner" is ever going to be able to capitalize on the appreciation? Call me a cynic, but I highly doubt it.

In theory, each seller could wait until a house is 50%, 60% or 99% paid off then come up with a reason to evict or convert to rent, and then "sell" the house to the next poor bastard. These people, being largely poor, will doubtlessly have limited access to the courts, and will therefore also likely have little recourse no matter if the eviction/conversion was legal. This could get ugly for a lot of people really fast. (Apologies for all the quotes, but I can't in good conscience use actual, commonly accepted terms for what these people are doing.)