What happens to my mortgage if my mortgage company goes belly up? Washington Mutual?

Question

Would the interest rate change?

Answer 1

Nothing changes with the term of your loan.  If you loan was for a fixed interest rate, then it stays that way.  

Just because a financial institution goes bankrupt or seeks bankruptcy protection it does not change any of the terms of the loans that it made previously.  

The only that might happen is that someone would buy that loan (it is an asset to the company seeking protection) and they would collect the payments under the original agreement.  Because the bank needs every penny of their assets, it is unlikely that the loan would be sold for 'pennies on the dollar'

good luck!

Answer 2

Believe it or not, this happens all the time.  Another bank will step in, buy up their payables and mortgages, and life will go on.  The only change to you will be where you send your check.

Answer 3

Relax.  Nothing happens other than that the loan is assumed by another lender.  No change to loan terms.

Answer 4

WAMU is strong- however, if.... another company would buy it (not for cents on the dollar like Don C. said) but they will buy it & continue to service it.  None of the terms will change.  This is common in the industry & has always been.

Answer 5

Some other company will buy the mortgage.  It will be a bargain for them....say they buy it for 25 cents on the dollar that is like getting a 75% discount.  But they will still expect you to pay the full amount of the mortgage.  In bad times there are also big winners.  You might default on the mortgage (stop making payments) then you will have big legal trouble...the new company will take the house, pay you nothing even if you have some equity and auction the house to the highest bidder,, keeping all the money.  This is a very sketchy answer... a lawyer will give you a longer and more complicated answer with more options but mostly it comes back to something like this....  do not expect high quality legal advice on "questions" or most websites.  That is why lawyers get rich....