Which of the following is TRUE concerning wraparound Loans?
A)The borrower makes payments on an existing loan
B)The lender makes payments on an existing loan
C)The lender only makes payments on the second mortgage
D)The borrower only makes payments on the second mortgage

Question

Quizplus · Accepted Answer

In a wraparound loan, the lender makes payments on an existing loan while the borrower makes payments to the lender on the new, larger loan that wraps around the original. This arrangement allows the borrower to refinance an existing loan by receiving a new loan at a higher amount, usually at a higher interest rate.

Which of the Following Is TRUE Concerning Wraparound Loans