What would happen to an existing mortgage through, say, WaMu for example, if WaMu was to go bankrupt?

Question

I have an existing ARM with an attractive rate that is about to adjust to 5-1/4% - Still a good rate. Do I need to shop around for a solvent lending facility? (And does one exist?)

Answer 1

Someone else would buy their assets. You'd still be on the hook for somebody under the same contract.

Answer 2

Nothing will happen except another lender takes over the loan.  No change to loan terms.

Answer 3

Nothing changes with the term of your loan.  

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 thing 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'

You have your money and you are repaying it.  You don't really care if they are solvent or not.  You should only be concerned about solvency if you have in excess of $100,000 deposited at the bank because that is the level to which the FDIC insures DEPOSITS.  

good luck!