Posted by Ed Garcia on March 23, 2001 at 09:55:45:
You could sell the house on what they call a “Wrap-around Mortgage”.
A Wrap-around Mortgage, is when the seller creates a new loan, encompassing their existing loan or financing, should they have a second mortgage as well as a first.
Example: The sale of a $100,000 property with a $20,000 cash down payment by the buyer and an assumable senior loan balance of $60,000, creating a $20,000 shortage, can be financed by the seller who would carry back a new wraparound loan for $80,000. This
wrap-around would require the borrower to make the payment on the $80,000 while the seller would retain the responsibility for making the required payment on the undisturbed existing $60,000 loan.