Depends on the circumstances and the state. 

however its a great way to bugger up the original seller.. IE in the case of a default to the person you sell it to.. I have seen these go very bad.

For a very well financed investor who if the loan is called can cash it out without benefit of rei  ( because they can't refi because they don't own it)  and can continue to make the payments if the person they sold it to defaults while you go through the foreclosure process.. this can work.

But the risk to the seller is great in these deals.

The risk to you as the middle man is simply your conscience... IE if it all goes bad do you walk .. or can you solve the problems.. because if you do not have the wherewhithal to cure .. then you just walk away... Not that you intended to .. and it bothers you but its reality.