wraparound mtgs. - Posted by Bill

Posted by Bill on December 08, 1998 at 09:19:22:

Phil, thanks for your comments. Will take your advice about adding the presentation clause. Bill

wraparound mtgs. - Posted by Bill

Posted by Bill on December 08, 1998 at 08:34:55:

I recently made an offer on a SFD using a wrap around mortgage as a part of the structure. The Realtor presenting the offer laughed and said that this type of financing was a 70’s thing, and that it isnt used in todays market, (California) Whats the real deal here? I see these things talked about every day in this forum. Thanks in advance for the information.


Re: wraparound mtgs. - Posted by A Miller

Posted by A Miller on December 08, 1998 at 13:19:05:

Have wrap going right now. Gave seller 3 days to have
attorney review and approve. You can recommend a real estate attorney and pay for the consultation if necessary if that`s the only hold up. Good Luck.

Re: wraparound mtgs. - Posted by Bud Branstetter

Posted by Bud Branstetter on December 08, 1998 at 11:19:51:

The wrap around was a thing of the 70’s because there were non-qualifying assumable mortgages. When deeds changed hands the bank was not in a position to object. Today, because there are fewer non-qualifying assumable mortgages and the use of the wrap could wave a red flag in the lenders face. Today, land trusts, Lease options and contracts for deed are used to accomplish the same thing. What would you call a contract for the beneficial interest of a trust to a tenant/buyer when you are controlling the property through an option or contract for deed. It is still a wrap.

How open, or knowledgeable, the realtor is unknown. But unless you have him educated and on your side you are better off finding a way of talking with the seller to explain your offer.

Re: wraparound mtgs. - Posted by phil fernandez

Posted by phil fernandez on December 08, 1998 at 09:13:35:


The realtor is misinformed when he makes that statement. What he is really saying to you is that he does not understand the mechanics of a wraparound mortgage or how to structure it.

I would make the offer with the wraparound and put a clause in your offer that reads, " purchaser has the right to accompany the realtor when the offer is presented." This does two things. It assures that the offer will actually be presented. And two it allows you to expain the offer to the seller in person.