Frequently Asked Questions (FAQ)
Can my loan be sold? What happens if my lender
goes out of business?
Your loan can be sold at any time. There is a secondary mortgage market
in which lenders frequently buy and sell pools of mortgages. This
secondary mortgage market results in lower rates for consumers. A
lender buying your loan assumes all terms and conditions of the original
loan. As a result, the only thing that changes when a loan is sold
is to whom you mail your payment. If your loan has been sold, your
existing lender will notify you that your loan has been sold, who
your new lender is, and where you should send your payments from now
on.
If your lender goes out of business, you are still
obligated to make payments! Typically, loans owned by a lender going
out of business are sold to another lender. The lender purchasing
your loan is obligated to honor the terms and conditions of the
original loan. Therefore, if your lender goes out of business, it
makes little difference with regards to your loan payments. In some
cases, there may be a gap between the date of your lender's going
out of business and the date that a new lender purchases your loan.
In such a situation, continue making payments to your old lender
until you are asked to make payments to your new lender.
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