Your loan can be sold
at any time. There is a secondary mortgage market in
which lenders frequently buy and sell pools of
mortgages. This secondary mortgage market results in
lower rates for consumers. A lender buying your loan
assumes all terms and conditions of the original
loan. As a result, the only thing that changes when
a loan is sold is to whom you mail your payment. If
your loan has been sold, your existing lender will
notify you that your loan has been sold, who your
new lender is, and where you should send your
payments from now on.
If your lender goes
out of business, you are still obligated to make
payments! Typically, loans owned by a lender going
out of business are sold to another lender. The
lender purchasing your loan is obligated to honor
the terms and conditions of the original loan.
Therefore, if your lender goes out of business, it
makes little difference with regards to your loan
payments. In some cases, there may be a gap between
the date of your lender's going out of business and
the date that a new lender purchases your loan. In
such a situation, continue making payments to your
old lender until you are asked to make payments to
your new lender.
