Posted by Linda Boehm on December 19, 2001 at 22:09:54:
If the seller fails to pay the mortgage can the original mortgage for the building be foreclosed .
Wrap Around Mortgage - Posted by sean mcguinness
Posted by sean mcguinness on November 03, 2001 at 16:11:20:
What i know about a wrap around mortgage from carlton sheets program
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you give them a note, but one question is, what does that note specify?
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After you give them a note, are you paying the seller the wrap around mortgage?
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At the same time you are paying the wrap around mortgage to the seller, the seller is paying the 1st position mortgage off. When the seller pays of his or her loan then you are titled the property deed. and then you finish paying off the 2nd mortgage with the monthly cashflow, which just became the first mortgage . Correct?
Any information to clarify this type of creative financing would be greatly appreciated.
~Sean
Re: Wrap Around Mortgage - Posted by phil fernandez
Posted by phil fernandez on November 03, 2001 at 17:02:30:
You pretty much have the idea correct. Another way of looking at it is you are acquiring property leaving the seller’s mortgage in place. The seller is creating another mortgage that wraps around his existing mortgage. So you pay your seller and out of the proceeds your seller pays his mortgage.
I would either want to physically pay the seller’s mortgage or set up a 3rd party type of escrow and the escrow will pay the seller’s mortgage. This way you know that the seller’s mortgage is actually being paid and he’s not just pocketing the money.
Re: Wrap Around Mortgage - Posted by sean mcguinness
Posted by sean mcguinness on November 05, 2001 at 17:23:22:
hello i was wondering how you go about implementing a wrap around mortgage on the sales contract? and how would you go about finding an escrow for the mortgage, and could you explain the procedure and results of doing that. thanks for your time
Sean
Re: Wrap Around Mortgage - Posted by Nicholas Chin
Posted by Nicholas Chin on November 03, 2001 at 18:31:13:
Ah, I’ve been trying to figure out how wraps worked for the past few days and these are some of the most helpful posts I’ve read!
I’ve heard that a great course on the subject is “Wrap Your Way to Wealth” by Joe Arlt. You can find a description of it on johnburley.com (in his financial library section).
Also, there is quite a lot of discussion about wraps on Burley’s discussion forums so it is a good place to do some research if you’re interested on the subject or want to ask intricate questions (there appears to be a number people there who do wraps as their specialty).
Nick
Re: Wrap Around Mortgage - Posted by phil fernandez
Posted by phil fernandez on November 05, 2001 at 20:00:29:
I would put verbage in the purchase and sales agreement stating what the total mortgage amount is and it’s terms, interest rate, amortization, and monthly payment. Then I would state what the underlying mortgage is with it’s terms and that the underlying mortgage will stay in place.
As far as escrow agents to handle the monthly payments, I’d check with some local title companies or real estate attorney’s in your area. Also a bank for a small monthly fee may be able to be the third party.