What happens if countrywide goes bankruptcy?

Question

I have a conventional home loan and one of the mortgage companies is countrywide. How will it effect me if countrywide goes bankruptcy????? what will happen??

Could I shop for another company to take over that loan for a better interest rate or add it with my abn amro mortgage????

Answer 1

Any lender that goes out of business, ceases operations or files for BK, you are still obligated to remit your mortgage payment. A new lender will assume your mortgage from the lender and ALL Terms and conditions of that mortgage note will be honored from ANY new lender - just like when your note is sold. Same thing. Rate, terms etc remain the same, you just pay a different company.

Don't expect to get a lower interest rate, if you want that call a lender but you will not get a new lender to 'negotiate' new loan terms, it just is NOT done.

Now, if YOU were behind on your payments, had a high interest rate, the lender MAY consider negotiating YOUR rate in order for you to be able to make your payments. Especially NOW. If you are in an adjustable rate mortgage and the rate just reset and adjusted UP and created a financial hardship, and you are unable to make THOSE payments, the lender may consider lowering the rate.

Hope this helps,

Answer 2

If you are happy with your current mortgage, keep it!

Number one, Countrywide isn't going under. Even if they close their Mortgage side, the bank side will stay strong.

Number two, if the mortgage side DOES go under, they will simply sell your mortgage to another company - your rate and terms will stay the same; you will just have to write the monthly check to someone else.

Also, you can't "transfer" your mortgage - the only way to get out of Countrywide is to do a full refi, and then you aren't guarenteed to get the same program you are on now.

Don't do anything unless you are unhappy with your current mortgage - once you sign it, you are locked in.

Answer 3

If they go Chapter 11, nothing will change for you.

If they go Chapter 7, their loan portfolio will be sold to other companies by the trustee in bankruptcy. You may be directed to send your mortgage payment to a different address when they go into bankruptcy, and to yet another address when your mortgage is sold, but there shouldn't be any other changes that affect you.

Mortgages get sold all the time, even without bankruptcy occurring. It's confusing when you get a notice in the mail telling you to send your payment to a different address. Should you trust that notice? Boy, if you could get a thousand people to mail just *one* mortgage payment to a different address, and cash all those checks, you could buy a plane ticket to Rio, couldn't you? But I've never heard of someone pulling off a stunt like that....

Answer 4

If you have a conventional home loan, there should only be one mortgage company.

But the previous posters are correct. Nothing impacts you.

If you want to call around to other lenders to get a better rate, you are refinancing your home. If you have two loans, and good credit, now is a great time to do that. Rates are low and mortgage companies are hungry. Shop around and you can get rid of the second.

Answer 5

I took out an Abn Amro mortgage and second mortgage, and they immediately sold the second to Countrywide. I don't think you can or should switch....

Answer 6

Some company will assume the mortgage should Countrywide go under.

Answer 7

It won't happen. As a matter of fact US Bank just gave them an infusion of funds in exchange for stock. I think the failures are over for now, and I'm very hopeful for a rate reduction within the next few weeks. But today - I'm going to the State Fair! Yea cotton candy, pork chop on a stick! Fried fruit... yummy.