wraparound debt


Mortgage debt in which the face amount of the loan overstates the actual debt; incorporates a special agreement between the parties for payment of debt service on the existing mortgage. The borrower pays the wraparound lender who in turn pays the debt service on the existing loan. The wrap is secured by a promissory note and mortgage document. The amount of the face value of the wrap is the sum of the outstanding balance on the existing mortgage plus the additional funds advanced to the borrower by the wraparound lender, with the result that the wrap "wraps around" the existing loan.
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wraparound annuity wraparound loan