Sub2 and wrap options

[Cody C.]

Good Afternoon!(or whatever depending where you are...=)

First of all, I'm not 100% clear on the difference between a wrap and a sub2. So if someone could clear that up for me, that would be excellent...

However, I just got off the phone with a escrow officer at my local First American. My question to her was in regards to sub2 or a wrap mortgage, and if she had acted as an escrow agent with them in the past, and could she in the future.

Her answer was interesting because I hadn't heard of it before. She said that typically in a wrap situation, what happens is that the buyer has a lawyer write up a contract of sale, and a memorandum gets recorded with the county so the seller cannot sell the property. Essentially, Fee title doesn't transfer to the buyer, but they have a cloud on the title because they are in contract to buy it. What this does is circumvent the scary due on sale clause that the bank could call. (at least that's what she told me.) I'm meeting with her next tuesday to discuss this more, but I figured I would put this out there and see what you all thought of it.

Thanks,
Cody