Laura Trahan

How Does The Mortgage Companies Going Bankrupt Affect Me?



Posted: Saturday, August 11, 2007

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It has been easy to be a little unsettled with all the talk in the media over the last few days about different mortgage companies filing for bankruptcy. American Home Mortgages announcement sent the stock market dropping 400 points before noon.

When Washington Mutual and CountryWide Mortgage also stepped forward to say they too were having difficulties, the market looked like it wouldn’t recover. As I sat at home, I have to admit I was clueless as to understanding what was actually going on.

I listened as one reporter said there would be no more loans given out. That people would have to save up huge down payments to be eligible to buy a house, no longer would 'no down payment' options be available. I listened as they explained that this would affect every other industry-student loans, credit cards-the American way of life.

I have to admit I began to panic. So I did what every American does-I decided to try to figure it out on the internet. How is this going to affect me-Joe Normal? Here is what I found out:

What if it was my mortgage broker who went bankrupt? What do I do?

Experts say that it is essential for you to continue to make payments. I know depressing news-who doesn’t want a house that is free? Experts say this isn’t a time to stop payments or try to negotiate terms for missed payments. Just keep paying. One note is that consumers should not be penalized for late payments that need to go to a new address. So call your company and ask where to mail the payment or who the new company is that will be servicing your loan. You should be allowed a two month grace period.

Will I still be able to get a mortgage?

What has been reported that no more mortgages will be given is entirely off base. Borrowers with decent credit histories and verifiable income will still be approved. The difference is that there are fewer choices now available. Loans that will be harder to get are ones that the income can not be verified or ones that are so high Fannie Mae or the government will not insure.

So will I still be able to get a no-down payment loan?

The answer is yes. According to the experts, loans will still be available with little or no money down. The loans will require strong credit and verifiable income.

Hopefully, this will resolve quickly before too many people panic mainly the investors on Wall Street.

Laura Trahan is married to an awesome, amazing, wonderful, etc. etc. man and has two beautiful kids. She has just recently woke up and started two new blogs http://lauratrahan.wordpress.com and http://tomballgtmom.wordpress.com. Feel free to visit anytime.
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Top-level comments on this article: (2 total)
» left by straight talk
 4 years 183 days ago.
111 fans. Follow straight talk on twitter!
While you may feel you are not impacted because of your economic status further investigation will reveal that it is the ramifications that follow and the impact to everyone across the board. Why, because like good birds of a feather someone has to pick up the problem and guess who that is? It is passed in along in any number of ways which impact you each and every day.
» left by Anonymous 3 years 126 days ago.
I thought this article was very helpful. Especially with two questions, do you recieve your house for free and does another company assume your mortgage? Although, my family mortgage is not affected (at this present time) I was curous. What I would like to know is if one of my financial companies, ING, are they involved in the sub prime loan business, if so than maybe I should pull my money out of their company.  I will check further.
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