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Lender Gone Under? Here's What To Expect.
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In the end, though, "whoever holds the loan is still going to have to honor the terms of the contract," said Lauren Saunders, a lawyer with the National Consumer Law Center.
Is there a chance that I would have to pay back the loan early?
No. Your mortgage is a binding contract. If it stipulates repayment over 30 years, then you still have 30 years from the start date.
"No one is going to lose their home because the lender goes bankrupt," Hooper said.
If the company goes bankrupt, can I stop repaying?
No. As the counterparty to the same contract, you agreed to repay the loan over a fixed period. Because someone owns the loan, you must honor that contract, Saunders said.
What if I pay a different company than the one I borrowed with?
If the company that sends you statements and collects your monthly payments is different from the owner, you are dealing with what is known as a loan servicer. If you have a servicer and the originator goes under, you may not even notice, Saunders said.
The servicer can change for any number of reasons, none of which changes the terms of the contract.
