What Happens to My Mortgage If My Bank Fails?

Nicole Spector   Mon, March 20, 2023

Since the abrupt collapse of Silicon Valley Bank, questions around the safety and integrity of all things banking have been swarming. One of those questions is: “What happens to my mortgage if my bank fails?” There’s good news here. If the bank that holds your mortgage goes under, the status of your loan won’t change because it will be acquired by a new lender, according to reporting from The Wall Street Journal. So there’s no cause for stress. That said, you do need to be diligent and take certain steps to protect your finances in the event that your mortgage lender goes belly up.

Check Your Mortgage for a Section on ‘Sale’ or ‘Assignment’

According to Freedom Law Firm, you’ll want to check your mortgage loan for a section that explains what happens in the case of a “sale” or “assignment.” This document should state that the terms of the mortgage remain in force regardless of bankruptcy of the lender.

Keep Up With Monthly Payments as Usual

If your lending institution goes bankrupt, that doesn’t mean you get a break from your obligation to your mortgage. You must continue payments as normal. Do not miss a month.

Maintain Diligent Records

If your mortgage provider is in trouble, its customer service wing will probably take a beating, making it difficult to get a hold of someone to walk you through the goings on. Make sure you have all your ducks in a row by keeping track of all documents your lender is sending you to keep you in the loop. Keep a paper or digital record of your mortgage payment history just in case an issue arises down the road (e.g., your bank hasn’t been paying off the loan properly on your behalf).

Check That Your Payments Are Clearing

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/happens-mortgage-bank-fails-120514492.html