Wraparound and DOS - Posted by blue Angel

Posted by jeff on September 09, 2003 at 14:38:16:

I am no expert! but if the wraparound does not trigger the due on sale clause (which I think it does), you could run into big title problems if the owner refuses to release the property. Legally the owner owns the property and a lean is placed on the title by a lender. If the owner sells to you by wraparound, the lender has no legal contract with the buyer. If the lender claims dueonsale clause, the buyer may be hung out to dry if the owner refuses to honor the sale. Be carefull have a real estate lawyer review all the paper work. Make sure the lender is aware of the terms of the deal. Any mistake could be costly.

Wraparound and DOS - Posted by blue Angel

Posted by blue Angel on September 08, 2003 at 16:56:54:


After doing a search on the forum and research on other source, there seems to be contradictions regarding wraparound mortgage, deed title and due on sale clause.
It’ll be great if anyone could help clarify these:

a. The wraparound contract is made between the buyer and seller with seller remaining on the original mortgage and title. Since there’s no title transferring invovlved, I don’t need to worry about duo-on-sale being triggerred. Right?
b. In a message Ed mentioned only way that a wraparound will not trigger a DOS is selling under land contract that?s NOT recorded. This wouldn’t be necessary provided A is true.

Any help is appreciated in advanced. Please, don’t reply if you’re not sure. I don’t need to get further confused. Thanks.

Re: Wraparound and DOS - Posted by Bill_AL

Posted by Bill_AL on September 09, 2003 at 13:44:46:

You might want to post this same question for Bill Bronchick on the legal forum.