Sticky Situations: Bankrupt Mortgage Lender and a $10,000 Engagement Ring

Your mortgage lender going bankrupt should not affect your home ownership.

The fact that your lender may be going bankrupt should not affect you at all. Your loan would likely be sold off or assumed by another lender subject to the terms and conditions you agreed to when you signed it—terms that will not change. You have a legally binding contract that not only obligates you but also protects you. VADZIM SHUBICH/Shutterstock

Dear Mary: I just read that that the company that holds my home mortgage is under investigation by the feds and has a net worth of negative $63 million. This company holds title to my house. If it goes into bankruptcy, am I at risk of losing my home, even though I’ve never been late on my payments? I don’t want to refinance with another company, because I am locked in at a great rate for the life of the loan and refinancing would cost a lot of money.—Angela

Dear Angela: From what you’ve told me, I don’t think you have a thing to worry about. I do believe you have stated incorrectly that the lender holds title to your home. I am quite certain the title is in your name, with the lender having a lien on the property secured by a note and deed of trust.