What To Do When Your Bank/Mortage Holder Goes Bust

Money

by Lamar Tyler | on September 26th, 2008 | 2 comments

TheMom and I wish we could take something from this financial crisis like a free home but unfortunately that is not the case. The bank that holds our mortgage has, shall we say “gone away” and wouldn’t it be nice if we just didn’t have to pay that mortgage loan back? Well that’s whatever, see below a question and answer on the topic from cnn.com.

Question: Viewer from North Carolina: If the mortgage company that holds my mortgage goes out of business, what happens to my home?

Velshi: If your mortgage company goes out of business, your mortgage is still safe. … The mortgage part of that business, the good mortgages get bought by another bank. So nothing will happen to you or your home at the moment.

All of this is having an effect on the price of your home or the ability of someone to buy your home because they can’t get credit easily. But your home and your mortgage are not affected by the fact that your mortgage company may go out of business.

If you hear that your bank or mortgage company is going out of business, your obligation is to continue to pay your mortgage unless you get in writing that that situation is changed. Sometimes, your bank sells your mortgage to someone else. Then you follow those instructions.

But when you hear your company is in trouble, that doesn’t give you the option of not paying your mortgage. So please continue to do that because if you don’t pay your mortgage, it will affect your credit rating and that will affect your money — your ability to raise money, to borrow money at a good interest rate.

Lucky for us our mortage is still safe and someone else bought it, Yay!!!

BMWK is this mess crazy or what? Did McCain blow up the tentative bailout agreement? Did anyone see the rundown of yesterdays meeting where they said Obama was asking questions and involved and John McCain just sat there most of the time not saying anything, is this hy he cancelled Letterman and came back to DC for?

About the author

Lamar and Ronnie Tyler are the creators of the award-winning blog BlackandMarriedWithKids.com . They also are behind the Amazon.com bestselling DVDs Happily Ever After: A Positive Image of Black Marriage, You Saved Me and Men Ain’t Boys that explores manhood in the African American community. The Tylers are also the proud parents of four children.

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Comments (2)

Peter Wilkins Friday - 26 / 09 / 2008 Reply

Make sure you keep all receipts and taxes on your payments (this goes without saying). I am in Alabama and people try to steal property this way by trying to pay taxes on the property and adversely possessing it.
Anna Friday - 26 / 09 / 2008 Reply

It would be nice to have your mtg. payment disappear because the bank folded. The foreclosure crisis that when are in are due to a number a reasons. The buyer not doing their research and knowing the difference between a fixed rate, a flexible rate and a adjustable rate. A fixed rate is locking in your loan that will be the same amount for the duration of the contract. Now your mtg. rate is still the same but if you escrow you payment may go up due to property taxes and insurance. While watching the news there was a woman packing her belongings because her mtg. pmt. went up $1200 per month due to an adjustable rate. Those who get those adjustable rates love their mtg. payments but forgot to refinance before the adjustable rate kicked in. The brokers selling these homes are not telling the buyers the difference in financing. They saw an eager buyer and wanted to give them the best rate at the time. Fannie Mae and Freddie Mac are already a gov. lender. 50% of all home loans are with either of the two lenders. They are for first time home buyers without the at least 20% down. I know a few ppl who did not mail thier mtg. pmt. but mailed the house keys. Should we the tax payers allow the gov. to bail out these foreclosed homes? I think what should be done is to allow them to refinance but let everyone have to same interest rate. I don't want to have to bail out my neigbors home in order to keep one less empty home in my neighborhood from depreciating what is left of the value of my home.