How To Word This Wraparound Deal?
got a deal where seller has a first mortgage with bank . i wanted to assume the loan but bank declined and said could modify it for seller at better interest rate. seller has agreed to stay on note and do a wrap with me. question: how do i word this in my contract? is this seller carryback? do the pmts go to seller or the bank directly? how do i assure bank gets my pmts? thanks.
I am only answering your question and NOT GIVING you LEGAL advice. The wrap around mortgage is inferior to the first lien. Yes, it is essential a seller financed mortgage. The pmts normally go to the seller directly and he/she account for all funds. It could go to the bank as well. (Your Wrap-Around Rider will state what the arrangement that you and seller agree to)
Be direct with it and ask the lender if you can say:
The "wrap-around" mortgage/deed of trust subordinate
to the existing mortgage/deed. This will let the lender know that they still have the 1st position.