Wrap Around Mortgage – A wrap around mortgage is a sometimes used vehicle to provide secondary or additional financing. It is a mortgage which includes within its lien an existing or prior mortgage (it “wraps around” the existing obligation). The wrap around mortgage assumes the existing or prior mortgage, includes it with any additional financing being provided, creates a new mortgage for the total amount and, therefore, advances to a primary position. The mortgagor then makes one payment for the total amount to the wrap around mortgagee, who in turn maintains the debt service on the prior obligation.
