Are Wraps Risky?
I have read from several different sources that wraps are a risky investment. If the seller experiences any number of factors (divorce, bankruptcy,ect) that the buyer could lose the property and the equity invested. Is this true? What have you encountered? Is this a profitable undertaking?
Thank you in advance for your advice! 
Sarah
I'm not sure I understand your question. A Wrap can be a great investment for a seller. She is getting a blended rate of interest on the underlying mortgage and the amount she is financing. With a Wrap, the buyer gets a deed. So if the selller gets divorced or files bankrputcy, the fight is over who gets the revenue generated by the Wrap--not who get's the property.
The borrower makes the payments to her. She forwards the payments on to the lender and keeps the surplus. What could be sweeter? The only problem is if she doesn't make the payments and her lender forecloses.. The easy way around that is to make the Wrap payment to a loan servicing company. They forward the payment to the lender and the balance of the money is paid to her.. Yes, it does violate the due-on-sale clause but seasoned investors don't worry about that.
It can also be a good deal for the buyer He has little or nothing to put down, no credit check, & no bank qualifying. He gets a deed to the property. If he defaults then the property is taken back by f oreclosure. I would do a credit check to see who I'm deeding the property to and who I'm lending money to. Also, I might want to sell the Wrap under certain conditions.
There are other ways that I find more to my liking -but there's not much wrong with the wrap concept..
Thank you Sammyvegas!
I really appreaciate your response. Your reply answered my question. I'm sorry for the confusion!
Sarah