What if your mortgage lender fails?
Posted Dec 12, 2007 @ 12:15 pm, Viewed by 359 Visitors, Read 361 Times.
To mitigate damage in its loan portfolio, Washington Mutual is closing its home loan center in San Rafael this week. The bank will, however, continue to finance homes in Marin County through its Corte Madera office. Other mortgage companies in Marin aren’t as fortunate, however. GreenPoint Mortgage in Novato, for example, has been shut down and other brokerages are laying off employees.
This leads to the question “What should I do if my mortgage lender goes bankrupt?” Since your loan will, in all likelihood, be sold to another institution you are still obligated to the terms of the mortgage. The new lender will provide details as to where to send payment. In the meantime:
Make your payments Send the monthly installment to the same address until you are told otherwise. Typically your loan will be sold to another lender. In that case you should be notified within 15 days of the transfer.
Check the terms of the new agreement The law requires that the terms of the mortgage remain the same, including the interest rate and type of loan. If you run into trouble, contact your State Attorney General’s office.
If you’ve been approved (or pre-approved) for a loan, talk to your mortgage broker – who should already be working on a replacement. Otherwise, call your lender to see if arrangements have been made for another lender to handle the loan.
For more information on your rights, visit The Dept. of Housing and Urban Development (HUD) and search for RESPA (Real Estate Settlement Procedures Act).
This leads to the question “What should I do if my mortgage lender goes bankrupt?” Since your loan will, in all likelihood, be sold to another institution you are still obligated to the terms of the mortgage. The new lender will provide details as to where to send payment. In the meantime:
Make your payments Send the monthly installment to the same address until you are told otherwise. Typically your loan will be sold to another lender. In that case you should be notified within 15 days of the transfer.
Check the terms of the new agreement The law requires that the terms of the mortgage remain the same, including the interest rate and type of loan. If you run into trouble, contact your State Attorney General’s office.
If you’ve been approved (or pre-approved) for a loan, talk to your mortgage broker – who should already be working on a replacement. Otherwise, call your lender to see if arrangements have been made for another lender to handle the loan.
For more information on your rights, visit The Dept. of Housing and Urban Development (HUD) and search for RESPA (Real Estate Settlement Procedures Act).
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