Bankrupt Lenders- No Mortgage Payments?

Bankrupt Lenders- No Mortgage Payments?

One of the questions I am asked quite frequently is, "What happens if the lender I got my mortgage from goes out of business?"

That is a great question! I think a lot of people are concerned that they will somehow lose their home, or that the bank will ask for the loan to be paid back immediately. Well, neither of those things can happen.

Your debt is a valuable asset of the bankrupt lender and it will be sold and transferred to another lender. So all it means is that the firm receiving your payment will change.

You see the firm that receives your payment is called the loan servicer, and they may or may not own the actual mortgage itself. Most loans today are serviced by specialized servicing agents who don't own the loans but collect a fee from the owner to process all the payments and other paperwork, like collecting escrows.

Transfers of servicing occur quite a bit, occasionally because the servicing firm goes bankrupt, but more commonly because the servicing contracts get sold.

When a lender buys your mortgage they assume all the terms and conditions of your original loan. By law they cannot change anything other than where you mail the payment.

If you ever have questions and you want honest answers, don't hesitate to give me a call.

Thanks again for letting me answer all your financing questions. I look forward to talking with you soon!

Danny

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The Elite Lending Team at FEMBI
Daniel Poulos
Branch Manager / Mortgage Banker
250 So. Central Blvd #101
Jupiter, FL 33458

Phone: (561)373-4149
Fax:

djpoulos@elitelending.biz
www.EliteLending.biz

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The Elite Lending Team and I have been proudly serving the mortgage needs of our community for 20 years!

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