Neil
I would be VERY reluctant to sell this with a wrap and give THIS buyer title. It could get tied up in bankruptcy. Plus, he has a history of not paying on time so you could get stuck with a foreclosure and get your credit messed up if he does not pay on time.
The payments need to go directly to you then you pay the mortgage company! Do not let him make payments to your mortgage company.
California has some screwy laws so I’m not sure the best way to handle the situation. If it were anyplace else, I’d transfer to a Land trust making YOU the Trustee. Sell him the beneficiary interest of the Trust. None of it would be recorded. But, like I said, in California doing it this way may still require a long and costly foreclosure to get your house back. How long does it take to foreclose in California?
Find a BETTER buyer! $15,000 down on a $615,000 house is not enough!
Instead of two notes, it would be better to wrap the underlying loan.