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canna change law physics
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Mortgage Company Bankruptcy
Rick and the others in the business, what happens if the company holding your mortgage would go into backruptcy?
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James The pessimist complains about the wind; the optimist expects it to change; the engineer adjusts the sails.- William Arthur Ward (1921-1994) Red-beard for President, 2020 |
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03-09-2008, 10:57 AM
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Dept store Quartermaster
Join Date: Jul 2001
Location: I'm right here Tati
Posts: 19,858
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I imagine your loan (being an asset of the company) would be sold.
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Cornpoppin' Pony Soldier |
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03-09-2008, 11:08 AM
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I've never been in the servicing side of the biz. But rest assured, you'll still be on the hook for the payments to someone and I doubt you'll get a single month's break.
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03-09-2008, 02:14 PM
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canna change law physics
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Oh, it wasn't the about the payments. It was more concern whether the loan would be liquidated, and we would have to scramble to re-finance.
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James The pessimist complains about the wind; the optimist expects it to change; the engineer adjusts the sails.- William Arthur Ward (1921-1994) Red-beard for President, 2020 |
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03-09-2008, 02:37 PM
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Registered
Join Date: Oct 2006
Location: Colorado, USA
Posts: 8,279
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I'm not sure what you mean by "liquidated," but your loan is a contractual obligation, you have certain payment obligations. If it were sold, the buyer could not alter the terms of the loan without your consent - the buyer could not force you to pay it early, increase your interest, etc.
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03-09-2008, 02:53 PM
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canna change law physics
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What I am more concerned about is a chapter 7, where the bank is gone. Is it possible that the loan contract can be terminated by the bank or the bankruptcy court, and we would have to repay the loan in full?
We are with Countrywide. Our loan is not big, our housing prices were never part of the bubble, we have a fixed loan. Countrywide is possibly going to go bankrupt. I know that contracts can be terminated as part of a bankruptcy even under chapter 11. I am not itching to re-fi, but just concerned that my mortgage holder may go bankrupt.
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James The pessimist complains about the wind; the optimist expects it to change; the engineer adjusts the sails.- William Arthur Ward (1921-1994) Red-beard for President, 2020 |
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03-09-2008, 03:03 PM
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Registered
Join Date: Jan 2003
Location: IL
Posts: 1,639
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03-09-2008, 03:20 PM
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Unconstitutional Patriot
Join Date: Apr 2000
Location: volunteer state
Posts: 5,620
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I do not believe the loan documents allows the loan to be called. Generally, only commercial loans and lines of credit may be called. Of course, if the world starts to burn, anything is possible.
If, as you say, contracts can be terminated, then what obligates you to pay the principal down to zero? |
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03-09-2008, 03:33 PM
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canna change law physics
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I was reading up a bit on AHM and what happened afterwards. We are not doing our insurance or taxes through the mortgage. So we are not jeopardy of those going unpaid. However, there is also concern about "late payments" which are made on time.
If BOA aquires Countrywide, there is no problem. But if it actually goes bankrupt, I would think it would be tough to get a refi when our bank is under chapter 11.
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James The pessimist complains about the wind; the optimist expects it to change; the engineer adjusts the sails.- William Arthur Ward (1921-1994) Red-beard for President, 2020 |
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03-09-2008, 03:33 PM
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03-09-2008, 03:54 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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Red beard what rock have you bin under? You have a contract as stated above. You are an Asset of Countrywide that has value. Your loan would be sold to another comapny and that is all. End of story move along nothing really to see.
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03-09-2008, 04:12 PM
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Canadian Member
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03-09-2008, 04:42 PM
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