Commonly referred to as a wrap, carry, carry back or wrap around loan, This type of financing is when a buyer takes over the payments for the seller. This allows the buyer to get a loan without qualifying. The only catch is that most residential mortgage loans have a due on sale clause. What this would mean for a wrap loan is that once the title is transferred to a new owner, the loan should be paid off. Most lenders don't have a habit of checking on the status of the title. The banks main concern is the the mortgage instrument is being paid. As long as it is not deficient they usually don't care.
If you are considering doing a wrap or wraparound loan, I would recommend speaking with an attorney first. This type of loan does come with some concerns that need to be addressed.
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