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Parker
Guest
0.10 Dollars($)
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 Posted: Tue Sep 11, 2007 3:37 am Post subject: What to do if my mortgage company files bankruptcy? |
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Hi,
We've taken a refinance loan from a mortgage company but now that I've heard several of them filing bankruptcy I'm worried. What does happen if the company files bankruptcy? Do we still have to pay or should we stop paying for the mortgage?
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Mac_7
Guest
0.10 Dollars($)
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| Posted: Tue Sep 11, 2007 3:42 am Post subject: |
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| You will have to keep paying for the loan on a monthly basis. |
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 larry
Joined: 27 Jun 2007
Posts: 3328
473.51 Dollars($)
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| Posted: Tue Sep 11, 2007 4:10 am Post subject: |
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Hi Parker,
If your mortgage company files for bankruptcy, then the court will decide to sell off the loan to another company. Then you will have to make the payments to that company. But you should keep a record of all your checks as evidence that you have continued the payments. |
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Yellow Mortgages
Guest
0.10 Dollars($)
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| Posted: Wed Sep 12, 2007 7:59 am Post subject: Mortgage Help |
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| speak to the regulatory body in your country for example in england the Uk's leading mortgage broker Yellow Mortgages says speak to the FSA |
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Jessica
Community Mentor
Joined: 08 Jun 2004
Posts: 715
Location: OHIO
130.36 Dollars($)
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| Posted: Thu Sep 13, 2007 3:14 am Post subject: RE: what to do if lender files bankruptcy |
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Hi Parker,
It's a myth that when a mortgage company files bankruptcy, the borrower need not pay for his loan any more. However, let's hope that your mortgage company does not file bankruptcy and even if it happens, there's a possibility that your original lender is no longer your servicer. May be he has sold off the loan to some other lender or investor. Your loan can then be serviced by the new lender or the original lender may also service (collecting monthly payments and escrow) the loan on behalf of the former. That's how the industry works.
What actually happens in the mortgage market is that, various loan products taken out by you as well as other borrowers are bundled together into mortgage securities and then sold off to investors.
However, if the original lender still holds the loan, most probably it will decide not to make any more loans and service loans of old customers like you. In such cases, all you need to do is continue making the payments. But if the lender wants to sell the loan because he too needs cash to get out of the crisis, then you will find some other lender servicing your loan and collecting payments from you.
Thus, whatever happens to your lender, it is you who needs to continue paying for the loan.
Regards,
Jessica
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