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Guest

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?

Guest

You will have to keep paying for the loan on a monthly basis.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

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.

Guest

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

Jessica

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

Guest

How do we get our mortgage co. who has gone bankrupt to co-sign our insurance check for damage done to our home during a violent wind and hail storm? We cannot make needed repairs and cannot reach the mtg. company.

Posted: Tue Aug 25, 2009 9:54 pm Post subject:

Gypsy...I don't think your mortgage company would sign your insurance check as they have already gone bankrupt. You need to check out who owns your mortgage now. The new mortgage company can help you with your insurance check.

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What to do if my mortgage company files bankruptcy?

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