What happens if my mortgage lender goes bankrupt?
Jan Meriss Alfonso Assistant at Ascent Law LLC If your mortgage lender goes bankrupt, the most likely result is that your home loan will be transferred to another bank. You will still be responsible for making your monthly payments to the new lender. Whether your interest rate stays the same or increases depends on the new lender's terms. • Chapter 13 bankruptcy allows you to keep your home When your mortgage lender goes bankrupt, you can keep your home through a Chapter 13 bankruptcy. But the process of getting a new loan after bankruptcy is difficult, and you must be careful not to violate your repayment plan. While a Chapter 13 bankruptcy can help you keep your home, it will not keep your mortgage lender from foreclosing. However, if you have enough money to pay off your debts, Chapter 13 bankruptcy may be your best option. The trustee will negotiate with your mortgage lender and your creditors to come up with a repayment plan that will allow you to keep your home. However, if...