It is obvious that banks and lending institutions have tightened down their lending practices due to the mortgage meltdown. But that doesn’t mean that there aren’t still buyers. So what ends up happening is you get a lot of people wanting to buy houses, a lot people wanted to sell houses, but no way to finance the transaction.
So…in comes the seller financing. Owner financing has always been around, it just hasn’t had to be used much since the 80’s when mortgage rates were peaking. But now, sellers are having to decide between financing their buyers, or not selling their homes.
Kerry Suess describes the situation in more detail here.