Finance
A 'wraparound mortgage' in real estate occurs when:
AA second mortgage is taken out to cover the down payment
BA new mortgage encompasses and includes the balance of an existing first mortgage✓ Correct
CMultiple properties are used as collateral for one loan
DA lender assumes the seller's existing mortgage
Explanation
A wraparound mortgage is a form of seller financing in which a new loan encompasses the existing mortgage balance. The seller continues paying the original lender while collecting higher payments from the buyer.
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