Not the same. - Posted by Brent_IL
Posted by Brent_IL on August 24, 2003 at 19:18:26:
An installment land contract is the same as a contract for deed, i.e., the seller holds title until you make the agreed upon payments. A wraparound is a junior mortgage that encompasses all underlying liens.
I’m not saying that XXX’s answer is wrong, but it isn’t that easy. For an attorney or title company to draw up the supporting documents, they need to start with a purchase agreement between the parties. The purchase agreement has to address the wraparound.
The benefit of a wrap to the seller is that he receives interest on the purchase money mortgage that he extends to you, and he also receives interest on the non-equity part that represents the accumulated balances of the liens. This part doesn?t belong to him because it would have to be paid to the bank if he sold for cash, but he earns money on it anyway.