VIEWS: 87 PAGES: 5 CATEGORY: Real Estate POSTED ON: 9/17/2010
The wraparound mortgage is two or more mortgages consolidated into one payment. This mortgage may allow the buyers to purchase with a small down payment and the added benefit of a low-interest-rate first mortgage. The sellers receive all of their cash at the time of closing. The lender wraps new money around an existing assumable mortgage loan. If in the future the borrowers have the cash available, they could pay off the new money and resort to the original, low-interest mortgage. If the mortgage contains a due-on-sale clause, it cannot be wrapped. Wrap mortgages are used when interest rates are high, allowing the buyer to take advantage of the lower rate existing mortgage without having to come up with a large down payment as in the case of a loan assumption.
Wraparound Mortgage MADE the (date) by (Name of Mortgagor), an individual, whose address is: 1109 Laurel Drive, Flowood, MS 39232, hereinafter called Mortgagor in favor of (Name of Mortgagee), is an Alabama Bank organized and existing under the laws of the State of Alabama, and is hereinafter called Mortgagee. 1. Mortgagor will pay the acknowledged indebtedness according to the terms provided, and understands and agrees that the character and nature of this mortgage instrument is one of a "wraparound" mortgage, and that if mortgagor pays to mortgagee the full amount of the indebtedness evidenced by the above- mentioned mortgage note dated (date), hereinafter called the Note, in the principal sum of $____________, together with all accrued interest as specified, and performs, complies with, and abides by all of the conditions, agreements, and covenants specified in the note and in this mortgage as well, then this mortgage instrument shall cease, terminate, and become null and void. 2. The mortgaged premises are subject to the lien of the following-described mortgage (the senior mortgage): (fully describe existing mortgage by specifying date and location of its recordation, its assigned document number, the terms of the obligation, and any unusual or otherwise necessary information describing the note or notes secured by the existing mortgage). TRANSFER OF RIGHTS IN THE PROPERTY This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower’s covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in LOT 99, LAURELWOOD SUBDIVISION, Part 2, a subdivision according to a map or plat thereof which is on file and of record in the office of the Chancery Clerk of Rankin County, Mississippi, in Plat Cabinet ____ at Slot _____, reference to which is hereby made in aid of and as a part of this description. 3. Mortgagor agrees to adhere to, and fully comply with, any and all of the terms, conditions, agreements, and provisions of the senior mortgage, except as to the requirement of making payments of principal and interest on it. On compliance with all such terms, conditions, agreements, and provisions by mortgagor, mortgagee agrees to pay the installments of principal and interest due under the senior mortgage from time to time as they come due, and in accordance with the terms of that mortgage. Nothing in this mortgage shall require, or be held to require, the holder of the note secured by this instrument to perform any of the terms or provisions of this mortgage which are required to be performed or accomplished by mortgagor, except the payment of installments of principal and interest on the senior mortgage, and even then only in accordance with the terms, conditions, agreements, and provisions of this mortgage. 1 4. Notwithstanding provisions to the contrary which may be contained in the mentioned senior mortgage, mortgagor agrees to keep the senior mortgage in full force and effect for its entire term. Also, mortgagor further agrees that in the event of any default in the terms, conditions, agreements, or provisions of the senior mortgage caused by mortgagor, the default shall also constitute and be considered a default under the terms, conditions, agreements, and provisions of this mortgage. 5. Mortgagor grants, transfers, and assigns to mortgagee the entirety of the rents, profits, and issues of the subject premises after this mortgage accruing and becoming due as further security for the payment of the acknowledged indebtedness. Mortgagor also grants mortgagee the right to enter on and take possession of the mortgaged premises for the purpose of collecting the rents, profits, or issues, and to let the premises or any portion of the same, applying sums received as a result of the letting (after payment of all necessary charges and expenses) towards the account of the indebtedness. This assignment and grant shall remain in full force and effect until this instrument is paid and satisfied in full. 6. Mortgagee waives the right to enter on the mortgaged premises and collect rents, issues, and profits until such time as mortgagor is in default of any of the terms, conditions, agreements, or provisions contained in this instrument. Until such time as mortgagor is in default for violation of such terms, conditions, agreements, or provisions, mortgagor maintains the right to collect the above- mentioned rents, issues, and profits, and agrees to use and apply such sums in payment of the installments of principal and interest coming due under this mortgage, as well as in payment of any taxes, charges, or assessments levied on the subject premises when they become due and payable. Such right of mortgagor may be revoked by mortgagee on (Number) days' written notice properly served. 7. Mortgagor agrees to pay any and all taxes, charges, or assessments levied on the mortgaged premises when and as they come due or arise. In the event of mortgagor's default in such payments, mortgagee may satisfy and discharge the same and seek reimbursement from mortgagor. 8. Mortgagor will insure the subject premises against loss by fire, designating mortgagee as beneficiary under any and all such policies. Mortgagor will reimburse mortgagee for any sums expended by mortgagee for such insurance due to, or as the result of, a default by mortgagor in maintaining or establishing insurance coverage on the mortgaged premises and its contents as required, or for failure to assign and deliver any such policy or policies to mortgagee. Any and all such policies shall contain the customary and usual extended coverage endorsements. Also, if loss or damage occurs to the mortgaged premises, mortgagor agrees to, and is required to, immediately give notice as allowed and 2 required to mortgagee, who may make proof of loss if not made promptly and in a timely fashion by mortgagor. 9. Any and all notices, demands, or requests required or desired pursuant to this instrument shall be in writing to be effective and acceptable, and may be served on the appropriate party, organization, individual, or entity either personally or through the mail. Mortgagee agrees to notify the holder of the senior mortgage that the holder is duly authorized to accept payment of installments for the senior mortgage directly from mortgagee of this instrument, and to request that the holder of the senior mortgage direct all notices required to be given by the holder directly to mortgagee. The mortgagee agrees to provide mortgagor with any and all notices, demands, or communications pertaini
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