Escrow & Title
What is a 'wrap-around deed of trust' in Delaware and is it commonly used?
AA deed wrapping around multiple adjacent properties
BA security instrument using a new, larger loan that includes and 'wraps around' an existing mortgage, allowing the seller to retain the original loan; less common in Delaware which primarily uses mortgages✓ Correct
CA deed used in wrap-around land contract arrangements
DA construction deed covering multiple phases of a development
Explanation
A wrap-around mortgage (or deed of trust in states using that instrument) creates a new, larger loan for the buyer that includes the seller's existing mortgage. Delaware primarily uses mortgages.
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Key Terms to Know
Deed of Trust
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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