What happens to the customers' mortgages when the lending company goes bankrupt?

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What happens to the customers' mortgages when the lending company goes bankrupt?

http://quote.bloomberg.com/apps/news?pid=20670001&refer=&sid=aY3mu1qdRq94

Jay

They are sold to other lender's. This happens all of the time, anyway.

The new lender's must adhere to the same provisions of the loan. However, customer service may be better/worse.

In extreme cases, the government can takeover the loan. However, in a case like this, it's doubtful.

The new loans will likely be easily purchased by others simply because they can go at a bargain price.

bostonianinmo

The assets are sold to pay off the creditors. Your mortgage is just one of those assets. Some company will buy it out of bankruptcy and you'll start mailing your payments to them instead.

ProfessorC

All assets, your loan is an asset, placed in the control of the court. You will be notified where to make payments ASAP. Usually you will be ordered to send your payments to the court appointed trustee.

The sale is handled by the bankruptcy trustee and usually sold by auction or bid. Several loans maybe bundled and offered to potential buyers. When my previous lender was sold the new owners sold hundreds of the loans. They were bundled in groups of 100 and sold to other mortgage lenders.

Quixotic

Don't get your hopes up.

You still have to pay the mortgage. The mortgage is an asset of the company and will be sold to another company to pay the creditors.

Nothing. They keep paying the mortgages. The failed company's creditors simply take over, and the company continues to operate. Sometimes, creditors sell the mortgage portfolio of the failed company to another company, in which case the buyer of the mortgage portfolio becomes the lien holder.

Dr. Robert Rice

typically they're sold to another lender.

whazzabi

giggles07

Working in this business, the mortgage loan will go to the company that will buy their business that is why on your loan papers you will see ISAOA which means its Sucessors and or Assigns, meaning that if the company either sells or goes bankrupt that the company that buys will get all the customers data base and loans that are out. You should not see any changes for your billing except the company name.

Ben

Are you talking about NEW CENTURY FINANCIAL?!?!?! They have lost me quite a load....
Goodness it is I just saw the article! Yea bad investment on my part.

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