Get the FAQs on mortgage resets
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What if I owe more than my house is worth?

If you find yourself "upside down" in your home, you're not alone; a Bankrate survey indicates that 4 percent of U.S. homeowners, or about 3 million of the 75 million homeowners, are in the same sinking boat.

The situation is vexing because it prevents you from refinancing, borrowing against equity (there isn't any) or selling the home without making up the shortfall out of your own pocket. The only way to right your situation is to pay down debt and begin to build equity.

Doing this may involve any of the following belt-tightening measures: find additional income through overtime or a second job, temporarily suspend all 401(k), IRA and 529 college contributions, reduce your paycheck withholding, eliminate nonessential services such as cable TV and high-speed Internet and live within a strict budget that frees up the capital to dig out of the hole.

Tough? Sure. But it beats losing your home to foreclosure. Read how Bankrate's Senior Financial Analyst Greg McBride helped one single mom get her financial life right side up.

What if my lender goes bankrupt or stops lending before my loan closes?

Your mortgage loan may still be viable, even if your lender isn't. When a lender goes under, the court orders it to sell its assets to pay its creditors. That means another lender could well assume your loan.

But the timing of all this could be problematic for you and your impending close date.

First, call the lender to determine if it intends to make good on the loan, and if not, who will? Second, if the lender is unresponsive, call your state's banking official and ask who is taking over the lender's loans. Third, if you used a mortgage broker, call them as well; they may be able to find you substitute financing quickly. Finally, if no acceptable substitute loan offer is forthcoming, you may have no choice but to start over and reshop your loan.

What if my lender goes bankrupt after my loan closes?

Two scenarios are likely. If your mortgage has already been turned over by the loan originator to a loan servicing company (a common practice today), you may not even notice that the loan originator, or the company to whom they sold your loan, has gone belly-up.

It may be business as usual with your mortgage bill, while behind the scenes, your mortgage is being acquired by another lender through government-sponsored housing enterprises such as Fannie Mae, Freddie Mac or Ginnie Mae.

If your lender is servicing your loan when it goes bankrupt, chances are a new lender or a loan servicer will contact you shortly. By federal law, your previous lender is required to notify you within 15 days of any change in servicing, including effective date and complete contact information of your new mortgage service.

To avoid scams, be sure to compare the notices you receive from your old and new firms, and if there are discrepancies, do not send a payment to the new firm until you verify that it is your new loan servicer.

If my lender goes bankrupt, can I stop repaying? Could I have to pay off my mortgage at once?

Your mortgage is a secure and binding legal contract, as well as a valuable asset to your lender. Even though the company that originated the loan subsequently sells it or goes out of business, you remain legally obligated to repay the loan over the contracted period.

Subsequent owners of your mortgage loan are similarly required to honor the contract, and therefore cannot change its repayment terms. If you have paid off your loan and want to obtain mortgage satisfaction documents from your bankrupt lender, call or write your state's Attorney General. They should be able to identify the appropriate contact.