Wraparound Mortgage - Please help

**brianraymor** · 03-30-2009, 06:19 PM

Hello. I am in the following situation and am seeking advice on what people think.
I have a 4-plex for sale that I bought for $185,000 and have it for sale for $235,000 and I owe $135,00 on it. The person who is buying my building wants to assume my mortgage on a wraparound loan and give me $50,000 equity in another building. I'd like to make the $50,000 but I am concerned about having the original loan called by my lender. What are the chances of them finding out, and if they do, what are the chances they will actually call the loan? Also, in the event they do call the loan, how long do I have to pay them off? My real estate agent has written into the deal that it is up to the buyer to cure the loan if it is called, and that I can foreclose on him if he does not do so. What do you all think?

**clemy** · 04-01-2009, 06:58 AM

Originally Posted by brianraymor

The person who is buying my building wants to assume my mortgage on a wraparound loan and give me $50,000 equity in another building. I'd like to make the $50,000 but I am concerned about having the original loan called by my lender.

What form is the $50K in equity? Does that mean your "buyer" will sell their building and give you the $50K in cash or are they assigning you $50K of equity in the building but still retaining ownership of the rest?

Even if you are getting the $50K in cash, that can easily be eaten up in legal fees if the deal goes bad, and there is plenty of potential for it to go bad, very bad.

Forget what your real estate agent is doing, get a lawyer. RE agents are not supposed to practice law and you need legal advice, NOW!

**Greg** · 04-01-2009, 07:12 AM

I agree. Your agent is not qualified to set this up for you. There is way too much that can go wrong.

You are entering into a deal where the buyer wants you to help them commit fraud. This type of buyer can not be trusted. It almost sounds like you are being set up.

**BillJames** · 04-01-2009, 09:24 AM

Originally Posted by Greg

I agree. Your agent is not qualified to set this up for you. There is way too much that can go wrong.

You are entering into a deal where the buyer wants you to help them commit fraud. This type of buyer can not be trusted. It almost sounds like you are being set up.

It's always good to have a second pair of eyes go over your deal or any deal for that matter, no matter how experienced you are.