What to Do When Your Mortgage Lender No Longer
Exists
So you've paid your mortgage on time every month and have
always made sure that you review your yearly mortgage summary
from your lender. You stay on top of things and have
developed a good working relationship with your lender, even
though they may be thousands of miles away. Then one day
you wake up to find out that your mortgage lender has been
bought or sold, or even worse they have went bankrupt and just
closed up shop! Now what do you do and how does this
affect your mortgage?
There is an old saying that nothing is as certain as
change. It's certainly true in modern markets where
interest rates can change on a daily basis. When a
mortgage lender goes out of business, for whatever reason,
there are typically a lot of questions from those who are used
to sending in their payments every month. The very first
question is "How does this affect me?" - The good news is that
in every case your mortgage rates, payments and other terms
will not change. The only thing that is likely to change
is the address to where you send the payments, and even then
that might stay the same!
Mortgage lenders routinely buy and sell mortgage notes on
the open market. In fact there are mortgage lenders out
there who write mortgages for the sole purpose of selling them
in the secondary mortgage market. In years gone by when
you took out a mortgage from your local bank it stayed with
the bank through the entire life of the mortgage. Today,
typically a mortgage will be sold an average of 1.5 times and
rarely does it stay with the original lender unless they were
one of the larger mortgage underwriters.
When a mortgage company ceases operation that does not mean
that the mortgages they wrote no longer exist. They are
considered assets of the company and are sold on the open
market typically to the highest bidder. No matter how
much they pay for the mortgage your rates, terms and amount
due each month does not change.
The general rule of thumb is to always mail your payments
in to the same address you have been mailing them until you
hear from the new mortgage servicer directly. If you
have automatic withdrawals from your checking or savings
account you may not have to worry about doing anything - the
withdrawal may change automatically.
Above all, do not stop sending your payment in or "wait
until you hear from the new company". This will have a
negative effect on your credit and you could find yourself
heading down the road of foreclosure. Banks, lenders and
other underwriters have well established procedures in place
for buying and selling existing mortgage notes. In the
end the only thing you have to worry about is making sure you
continue to make your payments on time every
month!
| 
Copyright (c)2008, Refinance Loan Bid | Privacy Policy | Contact Us