What Happens if My Lender Goes Out of Business?
Sometimes lenders do go out of business. If so, their assets are either sold or assigned to a
receiver until a buyer (a new lender/servicer) can be found. Of course, as a mortgage borrower you
are still obligated to make your payments. And similarly, the lender purchasing your loan is equally
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. As is the case when
loans are sold, you will receive written notices from both your current lender that is selling your
loan (called a "Goodbye Letter"), and the new lender that is buying your loan (called a "Hello
Letter").
If you ever have concerns about a letter or email you may receive about where your mortgage
payments should be sent, always start by confirming that information with your current lender's
Customer Service Department, whose information will be listed either on your payment coupon
book, or your monthly mortgage statement. In other words, never send your payment to a new
address without first confirming the change with your present lender.
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Sometimes lenders do go out of business. If so, their assets are either sold or assigned to a
receiver until a buyer (a new lender/servicer) can be found. Of course, as a mortgage borrower you
are still obligated to make your payments. And similarly, the lender purchasing your loan is equally
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. As is the case when
loans are sold, you will receive written notices from both your current lender that is selling your
loan (called a "Goodbye Letter"), and the new lender that is buying your loan (called a "Hello
Letter").
If you ever have concerns about a letter or email you may receive about where your mortgage
payments should be sent, always start by confirming that information with your current lender's
Customer Service Department, whose information will be listed either on your payment coupon
book, or your monthly mortgage statement. In other words, never send your payment to a new
address without first confirming the change with your present lender.
back to FAQ
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and is subject to change at any time. Use of this site for informational purposes, and does not constitute a
commitment to lend. Equal Housing Lender. © 2007AmeriStar Home Mortgage, Inc.
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