Assumption vs wrap and subject too

[Nate Castle]

I am familiar with how an assumption works. How is a “Wrap” and “Subject too” different? Thanks!

[Jay Hinrichs]

Originally posted by @Justin Kane:

A sub 2 can trigger the due on sale clause unless you get approval from the note holder and is usually done as a direct to sale resolution, a wrap is usually done with longer term benefits to the seller and through a proper title company that can assure its legally set up and protected from clauses triggered

the wrap is simply a junior mortgage..  but unlike say you have a 100k first and a 20k second ( junior) your wrap is 120k wrapping the 100k but is still a junior mortgage. 

CA dealt with this in the early 80s  and came up with a deed specific for these transactions   Called

All inclusive deed of trust.. I suggest folks read these they are really informative on how these deals go down on paper.

My dad had a company call CA wrap LOL circa 1980 he did hundreds upon hundreds of them.  Keep in mind this was when interest was 15 to 18%  we would buy sub too at 5 or 6 % old mortgages and then wrap them with 15 to 18% wraps. so we made delta on the price jump and major delta on the interest.. have not thought about that in 25 years but thats what we did most of the 80s.. I think one year he did 800 transactions.