What happens if your mortgage holder goes belly up? eom

[Betsy Ross]

[dsc]

1. Your mortgage is an asset and would be sold to pay creditors

[exothermic]

2. Payments will be sent to someone else.

...

[Journeyman]

3. It's my fantasy my account would be "lost" in the confusion . . .

but unfortunately, what the earlier posters say is the reality: my debt is an asset and so would be sold to someone else.

But I'll nurture my dream all the while. . .

[Turbineguy]

4. Your assets

are lost in the confusion, your liabilities stay. That's how things work.

[Wcross]

5. More likely all records of previous payments would be lost!

They would make you "start over"!!!!!

[Joanne98]

6. Oh God!!!!!!!!!!

[lame54]

9. That's why you keep your own records

[TexasObserver]

7. The mortgage holder would very likely continue collections of your note payments.

Because (1) the note is often owned in the secondary market by someone who has an agreement with the lender to administer the loan for a fee, (2) such activities earn revenues for the mortgage lender, and (3) even in a chapter bankruptcy, continuing ongoing revenue producing activities is an objective.

But let's suppose the whole thing is in collapse. It is possible your loan gets ignored or lost for months or years. I handled a couple of situations just like that for clients in the late 1980s and early 1990s. The note, which is commercial paper and can therefore be resold, was held by the government's entity, the RTC, for years, then sold in a package of loans for cents on the dollar to a third party, and eventually the new paper owners asserted their rights by way of a letter accelerating the loan and demanding payment in full.

Bottom line is you could get a free ride for months or years, and eventually, you'll probably avoid ever paying those payments, but you'll have to honor the note eventually. You just won't likely have to pay penalties or missed payments. You'll reach an agreement with the paper owner for a certain number, and you'll get a new loan to pay off the owner of that paper for the agreed number.

I wouldn't count on getting lost in the shuffle, but it does happen.

[trof]

8. Happened to me 3 times in 2 years.

NH went through a bad banking crisis in the 80s.
Our bank folded and was bought by another bank which folded and was bought by yet another bank.
As has been said, some other mortgage company or bank will buy your loan and you'll start paying them.
They will notify you.

[Lex]

10. You'll send the mortgage payment to another lender or creditor

who purchased the assets of the mortgage holder who went belly up.