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Glossary:
Get help understanding the terms.
Can my mortgage 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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