MH Note Collateral

[Eric Lawson]

I just finished watching John Fedro's video (https://www.youtube.com/watch?v=pz7Onln5fNo) on MH Investing and I am a little confused as to how the payments work. If I purchase a MH with a note as he discusses in the video, then I am assuming the MH is held as collateral. But once I turn around and sell that MH via note to the end buyer, what happens to the original note to the seller? Is the MH still considered collateral? If for some reason I, as the investor stop paying the seller after I've already sold the home to the end buyer via note, what happens? 

Note: I do not ever intend to be in this situation, but I would like to be able to explain to the seller how the process works.