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Can
my loan be sold? What happens if my lender
goes out of business? |
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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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