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Dear Dr. Don,
I recently purchased a home with a new fixed-rate mortgage. However, the big-name company that bought my mortgage is teetering
on the verge of big financial loss and an SEC investigation.
What happens to my mortgage if the company goes belly up? Do I need to take any safeguards or wait on the sidelines
until I get a new mortgage statement from whoever buys the assets?
-- Concerned Kathy
 Dear
Kathy,
You got your money at closing. What's important now is that your payments are properly credited to the repayment of the loan.
Your home mortgage is a valuable asset in an investor's portfolio. A mortgage lender may need to sell that asset to free up
cash, but the audit trail of your payments keeps you compliant with the loan agreement.
I understand your concern but, short of refinancing, you don't have a lot of control over this situation. And
I'm not advocating that you refinance in this situation. Keep in mind that the firm that originated your mortgage may no longer
have your mortgage in its investment portfolio, and that the mortgage servicing component of your loan can be sold to another
party. (Mortgage servicing is the management of the payments associated with the mortgage.)
Again, your mortgage loan is an asset to the investor that has it in its portfolio. That asset can be bought and sold
without your permission. It's your credit and payment history that influences the value of the mortgage in the investor's
portfolio. The same is true with mortgage servicing. The mortgage service component of your loan can be bought or sold.
Your best defense is to keep tabs
on your mortgage payments and any escrow payments
on your loan. That way, you can make sure your
loan payments are properly credited to interest
expense and principal repayment and that your
property taxes and homeowners insurance are being
paid on time.
The amortization feature on Bankrate's Mortgage
payment calculator can help you make sure that the loan balance is shrinking as expected.
Managing your tax and insurance payments out of an escrow account is a little more time-consuming, but you can
confirm with your taxing authority and insurer that these payments are made.
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