DossDocs aims to alleviate lock-in effect by launching wraparound mortgage product

DossDocs on Thursday announced the launch of Seller Financing Docs, a product aimed at homeowners locked into low mortgage rates who have delayed a home sale rather than trading in their low rate for a higher one on their next home.

The product allows sellers to transfer their low-rate mortgage, often in the range of 2% to 4%, into a new loan for the buyer through a wraparound structure. The buyer makes one monthly payment to the seller, who uses part of it to pay their original mortgage while keeping the rest as income. This cash flow can help offset the cost of a higher-rate mortgage on the seller’s next home.

“This gives sellers a way to finally make a move they’ve been waiting a long time for,” said Dennis Doss, CEO of DossDocs. “They can go from a 2.5% to an effective 4% rate instead of jumping straight to 6.5%. It’s a win-win for the seller and the buyer, who finally have something easy to work with.”

Also known as an all-inclusive trust deed (AITD), the wraparound structure is often overlooked because of its complexity, a press release from the California-based company explained.

The cloud-based platform claims it’s the first company to offer complete, compliant loan documents for wraparound seller financing in all 50 states. Sellers, real estate agents and loan advisers can generate a full document set in minutes for $499.

“Most homeowners don’t even know this is a thing,” said Aletha Nelson, vice president at DossDocs. “It’s a great option for those who’ve been waiting and waiting for rates to come down. We knew this would be the best place for us to start as we expand into consumer loan docs.”

Seller Financing Docs uses standard Fannie Mae documents with a custom, all-inclusive rider and everything needed to close a compliant transaction.