What is a 'wrap-around deed of trust' in Delaware and is it commonly used?
Why A security instrument using a new, larger loan that includes and 'wraps around' an existing mortgage, allowing the seller to retain the original loan Is Correct
Answer B: A security instrument using a new, larger loan that includes and 'wraps around' an existing mortgage, allowing the seller to retain the original loan
Exam Tip: Escrow & Title
Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.
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Key Terms to Know
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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