If Your Mortgage Lender Goes Under

If Your Mortgage Lender Goes Under

 

More and more mortgage companies are closing shop as the subprime loan saga continues.  Here's what to do if yours shuts down:

 

1: Regardless of what kind of trouble the mortgage company may be in, you still need to send in your payments on time.  Remember, your payments are considered an asset to the company.  If a lender declares bankruptcy, those assets will just be sold to another lender.

 

2: The terms of your loan should always stay the same, no matter who holds your loan.  It's important that you thoroughly review the details of your mortgage agreement. The interest rate and the type of loan you get should not change.  If your lender does sell your mortgage, you should receive a letter from the company within 15 days that outlines the new mailing address and payment deadline.  You should also be given a toll-free telephone number that you can call if you have any questions.  You must get a grace period of 60 days to get your payments to the right place on time.  If you have any complaints or issues, write a letter to your lender.  The company is required to respond within two months of getting your letter.

 

3: If you have paid off your mortgage loan in full, and you want a mortgage satisfaction document from the company when it's no longer in business, go to your State Attorney General's office.  There you can find out the status of the company.  You should be able to find out who you can contact.

 

4: A servicer - the company you make your monthly check out to - may not think it's worth its while to negotiate with homeowners to lower monthly payments.  No matter who you make your monthly check out to - get on the phone if you're having trouble making payments.  The sooner you bring attention to the problem, the better off you'll be.

 

Do you have a mortgage now from a lender who has filed bankruptcy?  We'd love to hear your comments below.