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heather623 · Joined: 30 Sep 2008 Posts: 1 1.33 Dollars($)

Is a wrap around mortgage leagle in Oregon?

smithsussane · Posted: Tue Sep 30, 2008 8:38 pm Post subject:

Yes, I think a wrap around mortgage is legal in Oregon.

Guest

Even I think its legal. But why take a chance? If you are planning to take a wrap around mortgage, ask a lender. He will be able to give you the correct info.

lisaswoboda · Joined: 25 Mar 2009 Posts: 4 3.04 Dollars($)

If you are asking about whether it's legal to wrap your current mortgage with another for a contract sale scenario- yes, and no. The idea is ok, but most lenders have Due on Sale clauses that preclude the ability to do a wrap mortgage. You woudln't want to go to the trouble of doing the work and buying or selling a piece or property that way and have the underlying lender come back and call the note. As long as the property is owned on a private contract already, or owned free and clear- a wrap is fine. Be careful- it's caught many investors with their pants down!

gmakerley · Posted: Wed Mar 25, 2009 2:38 pm Post subject:

good thinking lisa. wrap-around (or blanket) mortgages were popular a long time ago, when life was relatively easy for the bankers doing loans. now things aren't easy. investors want what they want when they want it, and you can't just walk in the bank and talk to the president and split off the house you sold.

yes, it was like that once.

Guest

Yep- there are lenders that will allow you to do them- and they now call them cross collateralizing (blanket) mortgages- where you put two or more loans under one deed-and they do allow you to break off parts but it's misserable- often times its a lot of money- they want seveal appraisals (usually at least 2) to remove the lien, and often times, its at higher rates and fees.
More often when I see a wrap, it's where someone has a piece of property, and they want to offer another piece as JOINT collateral to cover the first house. The first house would only have a 1st, but the 2nd one would have a 1st, and then the title gets clouded with a wrapped 2nd which now ties it to another property. That gets messy. The lender on the 2nd house gets cranky and calls the loan, then you are stuck with not one, but 2 houses that need to be taken out in refinances.

It's better to get placed in the right loan at the right time for the right reason. There are still lenders out there doing 100% loans (Rural Housing)-and with the tax credits, etc, there often times isn't a reason to do these types of loans. It is REALLY helpful to get with a lender who has been around a while. Who has experience in many types of loans.

I worked with a bank (who shall remain nameless) for 13 years and i LOVED it- BUT I only had the products THEY offered. As a broker, I have access to 40+ lenders who offer all types of loans. Be sure you talk to more than the first person who you are referred to. Real Estate is a VERY expensive item- you don't want this transaction to be the one that you count as your "learning experience"- research twice, choose once! Best of luck!

gmakerley · Posted: Thu Mar 26, 2009 9:26 am Post subject:

lisa, i appreciate what you're saying about these mortgages. in this current marketplace, i would imagine that lenders are going to be even more tightly wrapped as it concerns something as arcane as a wrap-around.

the old days are just that - old days. lenders being liberal in interpretation will become ever more rare. this kind of product is dangerous for the common folk and only someone who knows precisely what he or she is doing ought to contemplate it.

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Is it legal to do a wrap around mortgage in Oregon?