Loan programs
Wraparound mortgage
A new seller-financed loan that wraps around an existing loan left in place
The buyer pays the seller on the larger wraparound note and the seller keeps paying the original lender out of it. The arrangement only survives while the underlying loan stays undisturbed.
How the exam asks about it
Connect it to the due-on-sale clause. If the first loan carries one, the transfer can be called and the wrap collapses.
Quick check: Wraparound mortgage
One question. Pick an answer to see the explanation.
Which term is being defined: “A new seller-financed loan that wraps around an existing loan left in place”?
Related terms
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