Our mortgage on our rental property is with American Home Mortgage...my first thought when I heard they closed their door was....oh, good no more payments!  But it was just a fleeting thought...I can dream can't I?????? 

LOL, Mary!!  Wouldnt that be great??  The market would come back in a hurry!!

I laughed too when I read what your client said...I'm glad he found out the truth, although that's probably not the answer he wanted to hear.

Aren't the defunct mortgage lenders obligated to inform their clients of what to expect now that they are going out of business?

Aaron that is actually a good question ha,ha and people have reason to worry about that now with all of the mortgage companies closing down don't they!

Its funny you wrote a post on this, because I had a client just today call and ask the same question.

Good Post and Reminder

DUH !

People are funny - I guess it doesn't hurt to ask! When I worked in the financial industry, we had people who didn't understand checking accounts either.  They thought as long as they had checks, they could keep writing (no matter that they didn't have money in the account); I know you have heard the old saying, "I can't be out of money, I still have checks left"  there were people out there who truly thought that!

Great post explaining that you do have to keep making your payments even if your mortgage company goes out of business.  Many home owners think they don't have to anymore and this clears it all up.

OMG. You must have clients like me..... always looking for a free ride

Geeze...Earlene's comment reminded me of my son and his first bank account...he checked at the ATM and it said he had $200 in the account...so he took most of it out...then about a week later there were bouncing checks all over Long Beach...'but mom, I checked and I had money!!!!"   SHEESH

Aaron, The sad part is that he wasn't joking. 

Sometimes I wonder how people make it thru life when they have such a skewed idea of reality.

Danielle--- I think he was bummed!!

Rosario-- Many of them are keeping their servicing departments open for now.  Once that is sold off of in BK, the new servicing company will contact  them.

Patricia---And its getting worse every day.

Gary---I got another one today too!!  Too much!

Laurie - You would think, right?

Earlene-- I have always been believer that the school systems should make Personal Finance a one semester core requirement in high school.   I have to believe that this would be far more beneficial to our kids than that extra semester of biology.

Linda-- Thanks!  I am very surprised by that but you are right!

Tom--- That is for sure.

Rey---He couldn't have been more serious.  I am sure there are plenty who think the same.

Jenny--- Did you watch Dateline NBC the other night?  Over 10,000 people a year fall for that "There is $20M waiting for you in North Africa that I need your help to get out...send me $14,000 first" email.  Same group!!  :)

Aaron,

Excellent reminder. Hopefully lots of homeowners will read this post so they can confirm what their loan obligations are regardless of their lenders' BKs. Undoubtedly it's a confusing time right now for many consumers, so a question like this is to some degree understandable.

Esko--- Agreed.  I am sure many people are curious if their lender will make it and if they don't what happens next.

Thank you very much for sharing, if you are in the business long enough, you will get that question.

Shane--- No doubt!