Mortgage Lenders Who Go Bankrupt

It may seem like private lending institutions like banks never make financial mistakes.  But the sad fact is that these institutions are run by individuals, and occasionally a mortgage lender or bank will run into troubles and might even go bankrupt.  If you have an outstanding mortgage and the lender goes bankrupt, what happens to your mortgage?  Unfortunately, your obligation to make payments will not disappear.  When a company goes bankrupt, their assets are transferred somewhere else, and like many material assets, an outstanding mortgage is also worth something.

Odds are, your outstanding mortgage will be transferred to another company or private lender, and after the bankruptcy your payments will go to the new lender.  Keep in mind that your original lender is required by law to inform you of this, and they must provide you with the name and information of your new lender.  Be wary of anyone claiming to be your lender and demanding money, as that too could be a scam.  Always check with your mortgage lender before sending payments somewhere new.