I read and article that said many sub-prime lenders who lend to high credit risk consumers at increased interest rates are going out of business. I am just curious as to what happens to the loan when the lender goes "belly up."
2007-03-16 01:27:13 · 7 answers · asked by rsviking39 1 in Business & Finance ➔ Renting & Real Estate
To take the answer one more step...
Even if the lender still owned your loan when it went into bankruptcy, your loan would be a valuable asset that could be sold to another lender. This would raise cash to pay the creditors who forced the lender into bankruptcy.
However, if you have loan that has not yet funded (closed), you're screwed.
2007-03-16 01:47:29 · answer #1 · answered by CJKatl 4 · 3⤊ 0⤋
No risk to the consumer. The risk is held by the people that bought the mortgages from the sub-prime lenders.
2007-03-16 01:30:32 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Loans are bought and sold as investments. Those loans will be sold as assets to some other company. The people who have existing loans will receive letters indicating where to send their payments. The terms of the existing loans will not change.
2007-03-16 03:36:49 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Loans are usually "sold" or assigned to another lender as they are technically "assets" of the company to be liquidated to settle company debts.
2007-03-16 01:35:42 · answer #4 · answered by wizjp 7 · 4⤊ 0⤋
I think you are correct about businesses going to other countries, but wrong if you think it is preferable that they stay and hire illegals here. There are many other issues associated with the out of control illegal alien problem which are much more costly than losing jobs. The most important issues are, the message that this country sends about its sovereignty, the integrity of its borders, and loyalty, or lack thereof, towards its own citizens over those of other countries. There is no dollar amount associated with any of those issues but they are just as tangible as the economic related problems.
2016-03-29 01:33:49 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Outstanding loans are usually sold off or transferred to another company. Unfortunately, they aren't forgiven. Sometimes banks/mortgage companies sell them off regularly anyway. I once had a small home loan and dealt with 3 different companies before I got it paid off.
2007-03-16 01:37:58 · answer #6 · answered by joannaserah 6 · 2⤊ 0⤋
nothing happens to the loan, you already got your money. The odds are it's being serviced by a different company anyways, and there will always be a company open to collect your money every month.
2007-03-16 04:04:14 · answer #7 · answered by Anonymous · 0⤊ 0⤋