If a bank fails what happens to the mortgages it holds?
Okay, this may be a stupid question, but I’m 18 and still learning the ends and outs of the economy and banking.
So, my question is, if a bank fails and goes under completely and holds mortgages but can’t sell the mortgages to another bank what happens to the mortgages?
Does someone always buy the mortgages or could it happen that no one wants to buy them?
But what if another lender does not want to assume them? What if they are failing mortgages or something?
I’m just asking, I do not have a failing mortgage..or any mortgage for that matter:)
Tags: Bank, fails, Happens, holds, Mortgages
They are ASSETS to the bank. Another lender will assume them with terms unchanged.
The assets first taken over by the FDIC if owned by a bank and then are sold to other banks or lending institutions.
In the case like Countrywide Mortgage, they were purchased by Bank of America, Washington Mutual was purchased by Chase, Wachovia taken over by WellS Fargo, etc.
All the same terms and conditions remain the same for the borrower, except you probably be sending your payment to another location.