I’m not knowledgeable about mortgage company operations, but wonder if anyone here can answer a basic question. What happens to your existing mortgage in a situation like this? Could this be a way of mortgage companies forcing people with low interest rate mortgages into new loans with higher rates? We bought our home two years ago at a very favorable interest rate of 2.99%. It is a VA backed loan.
The loans just get sold to another creditor.
No, the mortgage is an asset of the entity going bankrupt and may be sold to pay creditors. But the buyer of the mortgage cannot change the terms of the original contract. Our home mortgage changed owners three times and the only thing that happened is that we had to fill out new paperwork for the auto deduct to go to the new mortgage holder.