Loan Servicing
Wrap Loan Servicing
We collect the wrap payment, keep the wrap and the underlying mortgage accounted for separately, and make sure everyone can see that both loans stay current.
Last updated
What is wrap (wraparound) loan servicing?
A wraparound mortgage lets the seller keep their existing mortgage while the buyer's new mortgage "wraps" around the balance still owed. Wrap loan servicing means a third party collects the buyer's payment, helps make sure the underlying mortgage is paid as agreed, and handles the accounting, statements, and reporting in between.
A wraparound (wrap) note is common in Texas when a buyer takes over a property while the seller keeps their existing mortgage, and a new, larger note wraps around that underlying loan. The question everyone worries about is simple: is the underlying mortgage actually getting paid?
Wrap loan servicing answers that. Cedar Top collects the buyer's wrap payment, helps make sure the underlying mortgage is paid as agreed, and keeps the two loans accounted for separately so both sides stay clear and current. We become the borrower's point of contact and send monthly statements to everyone involved.
What's included
- Payments
- Accounting, processing, and auto-draft or web payment options
- Underlying mortgage
- We help make sure the wrapped loan is paid as agreed
- Statements
- Monthly statements for both lender and borrower
- Distributions
- Timely distribution of funds to the noteholder
- Account access
- Real-time account information online, for both parties
- Point of contact
- We are the borrower's primary point of contact
How servicing works
-
Send us your note details
Share your loan documents and how the note is set up. We will tell you exactly what we need to get started.
-
We board the loan
We review the terms, set up the account, and configure escrow, reporting, and payment options to match your note.
-
We onboard the borrower
The borrower gets a welcome and first-payment letter with their payment options. From there, we are their primary point of contact.
-
We service every payment
Payment accounting and processing, monthly statements, escrow for taxes and insurance, late notices, and IRS reporting - handled for you.
-
You get paid and stay informed
Funds are distributed on time, and both lender and borrower get real-time account access online.
Onboarding documents
Every note is different. Depending on the loan and how it is set up, we may need more than this.
- Promissory Note
- Deed of Trust
- Closing Disclosure or HUD-1
- Transfer of Lien (if applicable)
- Allonge to Promissory Note
- Truth-in-Lending
- Sales Contract
- W-9
- First Payment Letter
- Homeowners Insurance
What it costs and how to get set up
Wrap setups vary, so send your wrap documents - the note, deed of trust, and any transfer of lien or allonge - and we will confirm what we need to board the loan and what servicing costs. Cedar Top services Texas notes and does not provide tax or legal advice.
FAQs
How is the underlying mortgage kept current?
We account for the buyer's wrap payment and the payment due on the underlying mortgage separately, and we help make sure the underlying loan is paid as agreed. This is the main reason borrowers and sellers use a third party to service a wrap.
Who is the borrower's point of contact?
We are the borrower's primary point of contact and handle payment questions, statements, and account access for both parties.
Can you service an existing wrap?
Yes. Send your wrap documents - note, deed of trust, and any transfer of lien or allonge - and we will set up the account.
How long does onboarding take?
It depends on how complete your wrap documents are. Once we have the note, deed of trust, and any transfer of lien or allonge, we board the loan and onboard the borrower with a welcome and first-payment letter. Send your documents and we will give you a timeline.
Do you service wraps outside Texas?
Cedar Top focuses on Texas notes. If your wrap is outside Texas, contact us and we will tell you whether we can help.
Set up servicing on your note
Fill out the loan servicing inquiry form with general details and our team will follow up with onboarding steps.