This actually isn't true. The mortgage doesn't have to be recorded as long as it's with family. Only non-family loans have to be formally recorded. It does have...

It looks like you can. When you declare the new lender, there's an option to declare that the seller is furnishing the loan and they didn't issue a 1098.Checkin...

"is otherwise perfected under any state or local law that applies." A simple note between family members IS this qualification.