That has been the problem here in Texas. The t/b was getting ripped off by crooked operators. How would you like to put hard earned cash, all you have in the world, and then get kicked out if you miss one mortgage payment.
Any way to answer your recording question: When I sold about 40 houses on CFD I did not record anything. We just had a simple contract. Better for me if they defaulted and I had to evict. I gave a 60 day default clause and not two weeks like some I have heard about. This gave the t/b longer to cure.
If they are about to get refinanced and cash you out there is not need to record the cfd. Just a standard deed will do when you convey title.
They have legal rights but not ownership.
You can go either way with the taxes and insurance. Our tax authority will send the bills to the t/b if they are supplied a copy of the contract. It was sent to me c/o the t/b at their address. Same kind of deal can be done where the t/b pays for the insurance. Smart to check to make sure it gets paid because as the legal owner you are still responsible for both.
Section 5.076 of the Texas Property Code requires Texas executory contracts to be recorded within 30 days of execution. (It also requires that something be filed to reflect a termination if it does occur.) There are host of other disclosures required by the law. You should review Subchapter D, Chapter 5 of the Texas Property Code. Of course, there are changes to the law that go into effect on September 1, 2005. See HB1823 for those changes.
This is not intended to be legal advice. Consult your own attorney for legal adivce.