What happens to my mortgage if the bank goes under?

Question

What happens to my mortgage if the bank goes under?

Answer 1

A lot of us are worrying about that.  Payments that might get "lost" in the shuffle.    YOu must keep making the payments.  The bank has to make an effort to contact you when the payments are to go to someone else.   Did you read about the FDIC closing IndyMac Bank of California?  One of the biggest mortgage originators in the world.

Answer 2

Another bank/servicer will take over your mortgage contract, and the terms to which you agreed cannot be changed.

Continue to send the payments to the bank until you are advised otherwise.  You will be given a new address to which to mail your payments.

Answer 3

You just keep making your payments to the same address. Eventually the loans will be sold off to someone else and you'll get a notice and start paying them.

We have a loan with Indymac. Although it would be nice if they lost our loan, I'll keep sending them the payments.

Answer 4

It is most likely that the bank that gave you the mortgage sold that mortgage to an investor as part of a larger package of mortgages.  

If the bank goes under you are still liable on the mortgage payment to the investor that purchased your mortgage.  You are not relinquished of your responsiblity to pay.  Do not stop making your payments.

Answer 5

There are lender's that originate the mortgage, then they often sell the mortgage on the "2ndary" market.

The company you send your payment to is the "servicer".  They bought the right to collect the payments, or their a company that provides collection services for a lot of different mortgage holders.

The safest course of action is to keep making your payments to the location you're instructed to make them.