What to Do When Your Mortgage Lender No Longer Exists
Below is a MRR and PLR article in category Finance -> subcategory Mortgage.
What to Do When Your Mortgage Lender No Longer Exists
Summary:
You've diligently paid your mortgage on time and kept up with your annual mortgage summaries. Despite the distance, you’ve maintained a solid rapport with your lender. But what happens if your mortgage lender suddenly goes out of business?
Navigating the Change
Imagine waking up to discover that your mortgage lender has been sold, acquired, or worse, has gone bankrupt. What now? How does this impact your mortgage?
Firstly, take comfort in knowing that your mortgage terms?"interest rates, monthly payments, and other conditions?"remain unchanged. The primary alteration you might face is a change in the address to which you send payments, and even that may remain the same.
Understanding Mortgage Sales
Mortgage lenders frequently buy and sell mortgage notes. Unlike the past when a local bank kept your mortgage for its entire duration, today’s mortgages often change hands. On average, a mortgage is sold about 1.5 times unless it originates from a major underwriter.
When a lender shuts down, their mortgages do not vanish. They are treated as company assets and auctioned off to the highest bidder. Regardless of whom they sell the mortgage to, your loan terms stay intact.
What Should You Do?
1. Keep Paying as Usual: Continue sending payments to the same address until informed otherwise by the new mortgage servicer.
2. Automatic Payments: If you have automatic withdrawals set up, these might transition seamlessly to the new servicer without any action required on your part.
3. Avoid Payment Interruptions: Never stop payments while waiting to hear from a new company. Missing payments can damage your credit and lead to foreclosure.
Lenders have well-established procedures for transferring mortgage servicing, ensuring continuity for borrowers. Your main responsibility? Continue making timely payments.
You can find the original non-AI version of this article here: What to Do When Your Mortgage Lender No Longer Exists.
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