If I have a mortgage on my house and my lender becomes insolvent, what happens?
Do I still owe anybody money?
Who owns the title to the house (in my case mortgage is 20% of purchase price)?
Jon
Of course you still owe someone money. The lender went bust because the lender owes someone else more money than they have. Accordingly, that someone gets your mortgage and you pay them.
The receiver who buys up your lenders’ debt
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Of course you still owe someone money. The lender went bust because the lender owes someone else more money than they have. Accordingly, that someone gets your mortgage and you pay them.
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The mortgage would be sold to another bank. You would owe the new bank.
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Yes, you still owe. Your loan is an asset on the lender’s books. It will be taken over by another lender. You have title to the house – the lender has a lien on it until the mortgage is paid off.
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