Your mortgage remains in effect. Even if the lender goes out of business, someone else will take over the bankrupt company’s assets (the loan to you) and demand payments from you. If you don’t pay, they will take your house. You may even be sending your payments to a bank trustee (the entity who is managing the assets of the bank during the bankruptcy).

The terms of your loan term will not change.If you have a fixed rate mortgage, your rate will remain fixed. If you have an ARM, it will adjust according to the index and the original schedule. The bank taking over your loan cannot change the terms. No one will force you to refinance to new terms, either.

Tax statement at the end of the year Also, you may not get the tax documents (Tax form 1098) from the old lender at the end of the year, so you may not know what interest to deduct right away.

New Payment Instructions You should keep your eyes peeled for instructions in the mail on where to send your payment. This mail could look like junk mail so don’t throw away or shred mail without opening it. You may miss mail with instructions on where to send your payment. However, there is a good chance that even if you send your payments to the same place you always do, they will be received for awhile.

Mostly likely, you will not be affected by your mortgage company going bankrupt, and it will be business as usual, other than sending your payment to a new place.

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