Mortgage Wrap & Subject-To Contracting Cheat Sheet
This document outlines the key procedures for contracting subject-to and wrap-around financing transactions. It covers essential elements such as:
No Funds to Seller: Specifies the purchase price based on the payoff amount of the underlying mortgage, clarifies that the existing loan will not be paid off at closing due to the due on sale clause, and outlines the buyer's responsibility for closing costs.
Funds to Seller: Similar provisions with the addition of the seller receiving a specified amount at closing.
Special Concerns: Highlights the importance of obtaining necessary documentation, including the Note, Reinstatement, and Current Statement, and emphasizes the need for authorization to communicate with the lender. It also states the requirement for the 5.016 Disclosure and the involvement of a Residential Mortgage Loan Originator (RMLO) for multiple seller finance wraps.
Download this guide for a detailed understanding of contracting sub to and wrap transactions.