Wrap loans allow an investor to generate recurring monthly revenue from the sale of a property. Unfortunately, there is potential for abuse.

Therefore, we have developed this policy for investors who are wrapping our loans:

1. The homeowner must clearly understand they are taking a wrap loan and there is an underlying mortgage.
2. The wrap loan must be made to homeowner(s) who will live in the property. If any of the homeowners are married, both spouses must be listed on the loan.
3. We must have full contact info, including name, phone number, and email addresses for all occupants. This must be kept up to date if anything changes.
4. The terms of the wrap loan must ensure the underlying loan will be paid off at the same time or before the underlying loan, even if the homeowner loan is paid off early. This usually means the remaining principal amount of the homeowner loan must always be the same or more than the remaining principal amount of the underlying loan.
5. The homeowner must provide an insurance policy which meets our requirements. We must review and approve the insurance policy before the loan is closed. If the insurance is going to change at any time during the course of the loan, we must approve the replacement policy before the change is made.
6. The wrap loan must be serviced by a licensed and bonded third-party servicer. We must approve the servicer prior to the loan closing. If the servicer is going to change at any time during the course of the loan, we must approve the replacement servicer before the change is made.
7. All payments made from the homeowner(s) must go directly to the servicer and not to any other parties. The servicer will then distribute funds to us and the investor.
8. If the property is subject to an HOA, the homeowner(s) must sign a Power of Attorney form (which we will provide) to allow us to act on their behalf with the HOA.

If, in our sole determination, the investor violates the terms of this policy, we will immediately call our loan due in full.

This policy may change from time to time without notice. The investor expressly agrees to abide by all updates, whether or not they have been notified by us.