Mortgage blanket - Posted by Ed

Posted by Ed Garcia on December 05, 2001 at 10:26:46:


The term is Wrap-around Mortgage, not Mortgage Blanket.

A Mortgage Blanket as you call it, is a Blanket Mortgage and is a term used when you have a mortgage that covers more than one piece of real property.

And yes it’s possible to do, sellers do them all the time.

Ed Garcia

Mortgage blanket - Posted by Ed

Posted by Ed on December 05, 2001 at 09:59:15:

Can anyone tell me if it is possible to do a blanket mortgage on my property. Is it legal, and how would I go about doing it. Who would I have to contact.

Here is the situation:

I have a 2 Family home that is worth approximately $400K
The Current mortgage is 195K at 7.25%.

I would like to sell the home but carry the existing mortgage (seller financing if needed with a 10% down purchase price.)

Purchase price $400,000
Down Payment $ 40,000
Seller finance $360,000

Existing mortage $ 195,000 @ 7.25 1300 month
Seller financing $ 160,000 @ 7.5 App 1400 month

Buyer would then pay me 2700 a month (plus taxes, etc.)
And I would pay the existing mortgage of 1300 a month and would profit the 1400 a month for the 30 year term or until paid off.

Would this be possible to do. Are there issues with the existing bank loans that prohibit this.

Any information would be greatly appreciated.


Seller Financed WRAP Mortgage - Posted by Michael Morrongiello

Posted by Michael Morrongiello on December 05, 2001 at 14:10:17:

Your “wrap around” mortgage is feasible as long as the underlying lender does not elect to call their loan due for a violation of any due on sale clause that might exist.

You can also elect to simply SELL your “wrap around” mortgage down the road so that a lump sum cash payout can result to you and you can get “off the hook” with your lender.

The KEY will be in properly evaluating and structuring YOUR wrap around repayment terms with your buyer.

If I were going to do the Wrap around mortgage I would like to earn a “spread” of interest above and beyond what my interest rate would be payable to the Bank on their $195K.

To your success.
Michael Morrongiello

A blanket mortgage vs a wrap around… - Posted by David Krulac

Posted by David Krulac on December 05, 2001 at 10:34:18:

a blanket mortgage is a mortgage often from a bank on two or more properties. you own 123 main street and you own 452 elm street, you go to the bank and get ONE mortgage and it would be a blanket mortgage.

a wrap around is where you sell a property and carry the financing usually at a higher interest rate so that you make a spread on the interest as well as profit on the sale. your house at 123 main has a mortgage for $195,000 @ 7.25% and you charge the buyer 7.5%.

There might be two problems, one the bank may not look favorable on selling the property without paying off the mortgage. Its clause 17 of the standard mortgage contract aka “the due on sale” clause. Check the archieves here there has been plenty written on the DOS clause.

The second concern is that with banks doing 6% fixed for 15 years, many buyers may not want to pay you 7.5% interest.

David Krulac