Article: Trading on dreams.

May 01, 2003 (Personal Investor - ABIX via COMTEX)

The lack of regulation relating to "vendor financing" has led to abuse of the system in some cases. Vendor financing, or "wrapping", has been advertised as a way for aspiring home owners to secure their own property without the usual deposit. The purchaser is loaned funds at a high interest rate and is expected to build up equity in the home before refinancing under a conventional mortgage arrangement. The advantage for the property owner is a reliable capital gain as their interest rate is below that of the purchaser's. However, in the event of payment defaults, the property reverts to the original owner, ...

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