If Your Mortgage Lender Goes Under
Based on CNN report more mortgage companies are closing down. If your mortgage lender files for a chapter 11 bankruptcy these are some steps to take .
1. Keep making your Payments on Time
a. Even if your mortgage company goes under, your payments are considered assets to the company. When the company is sold, someone is going to buy those assets. Trust me; someone will want your money. Most cases the transfer is handled by government-sponsored enterprises (Fannie Mae, Freddie Mac) or Ginnie Mae.
2. Know your Rights
a. The terms of your loans should always stay the same. When the lender sells your mortgage you should receive a letter in 15 days notifying you who your new lender is, the new mailing address, and payment deadline.
b. You will be issued a new toll free number to call if you need any assistance. You will also have a grace period of 60 days to get your payment to the right place; it does not mean you don’t have to pay on time, it just means if it takes longer to get to the new lender it’s not considered late. Note: any complaints you may have, write a letter to your lender. Your lender has two months to respond back to your complaint.
3. Get Evidence/Statement
a. If you paid your mortgage off in full, make sure to request evidence to prove it. Ask for a satisfaction document from the company when it’s no longer in business or to your state Attorney General’s office.
4. Negotiating your loan will still be difficult
a. Some cases a servicer can negotiate your loan by 5%, but it can be difficult since servicers will have to front the money to the loan holders. There is also a limit on how much interest and principal can be forgiven. Regardless of who you are making your monthly payments too, if you are having difficulties paying your mortgage contact them.
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