Planetarion Forums - View Single Post - what would happen if your mortgage lender went under?

Tomkat · 14 Mar 2007, 01:28

I did a little research.

The mortgage company doesn't own your house as an asset. They only have debt owed to them by you. So they can't reclaim your house, but they can reclaim the debt (outstanding mortgage).

So when they went bankrupt, a liquidiation company would take over, and tot up how much is owed to them, how much they owe, and how much can be salvaged.

The company would then contact you, and as you said, you'd probably be able to come to some arrangement about paying off in a lump sum your total debt (eg: £100k). To do this, the obvious way would be to get another mortgage from another company.

If the arrangement is in your favour (as your contract was arranged to be paid off over 25 years, not in one lump sum), you may be able to haggle the price down a little bit (to £80k or £90k).

So apart from a load of administration with moving mortgages, you probably wouldn't be directly affected as much as you'd think.

14 Mar 2007, 01:28	#6
Tomkat :alpha: Join Date: May 2002 Location: London, UK Posts: 7,871	Re: what would happen if your mortgage lender went under? I did a little research. The mortgage company doesn't own your house as an asset. They only have debt owed to them by you. So they can't reclaim your house, but they can reclaim the debt (outstanding mortgage). So when they went bankrupt, a liquidiation company would take over, and tot up how much is owed to them, how much they owe, and how much can be salvaged. The company would then contact you, and as you said, you'd probably be able to come to some arrangement about paying off in a lump sum your total debt (eg: £100k). To do this, the obvious way would be to get another mortgage from another company. If the arrangement is in your favour (as your contract was arranged to be paid off over 25 years, not in one lump sum), you may be able to haggle the price down a little bit (to £80k or £90k). So apart from a load of administration with moving mortgages, you probably wouldn't be directly affected as much as you'd think. __________________ "There is no I in team, but there are two in anal fisting"