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Wraparound Mortgage

Wraparound Mortgage (Wrap Mortgage or Wrap). A form of owner financing whereby the seller of real property extends to the purchaser a junior mortgage which wraps around and exists in addition to the seller’s own mortgage.

Typically the new purchaser makes monthly payments to the seller, who is responsible for making the monthly payments on the underlying mortgage. If the purchaser then defaults, the seller then can foreclose and take back the property.

Because title transfers from seller to purchaser, most wrap mortgage transactions will violate the due-on-sale clause of the seller’s mortgage.

At Harlan and Associates, we would love to be your Closing Attorneys in Atlanta. Want to know more? Contact us and we will be happy to discuss how we can be of service to you!