CP

Hi,

Just got a letter from the FDIC.

It basically said my mortgage lender is now no more, and the FDIC is the receiver of my mortgage.

Somewhere in the letter it says: "The receiver intends to sell the bank's asset, including your loan, beginning 60 days of the closing of the bank. The receiver ENCOURAGES YOU TO REFINANCE YOUR LOAN IN THE NEXT 60 DAYS."

Now I have a 30 years fixed loan at 4.875%, balance about $980,000. Where do I find a refi. loan that is anywhere close to this loan? The loan is in good standing, never a late payment.

My question is: does the FDIC have the authority to unilaterally cancel my mortgage? If yes, then there is no such thing as a good loan out there as the lender can just cancel the loan and force a refinance to a lousy loan. Or you thinks this is a boiler-plate letter and I have nothing to worry about?

Thanks again for your education as always.

CP

FlatSix911

Pong, I have a friend in investment banking - I will check with him and get an expert opinion tomorrow.

CP

Ted,

Thanks. This is now weighing on my mind. My wife's too.

CP

MDamen

They are letting you know they are selling your loan to another investment company. They would prefer that you refinance at your cost so they don't have to shop your loan around. Notice that they "encourage" you to find a new loan. They do not "require" you to. they won't be cancelling your mortgage, just trying to find someone who will take it. Your loan will be packaged with others and then sold to an investment company. The FDIC will not get what the face value of the loans, they will have to sell it at a discount to encourage someone to take it. If you refinance before they sell it, then the FDIC gets the full value of the loan when you pay it off. Saves them lots of money.

CP

Mike,

Wonder if I can buy the loan at a steep discount? May be worth it then.

CP

JM993

Mike is correct. The FDIC will assign your loan to another lender or investor. Your loan agreement is a valid agreement which cannot be "cancelled" unless you breach a covenent which, as a matter of contract, allows the holder of your Note to accelerate your loan. In other words, you're fine.

Oh, and if you're wondering, yes I work as a consumer real estate attorney for a local bank.

mooty

there is a piece of law stating that when mortgage is sold, the seller and the buyer of such asset need to notify you the borrower.

it doesn't matter what price and whom bought/sold the mortgage, it doesn't affect you.

your terms stay the same. perhaps even the servicer will be the same. just make sure that your pmt after they sold the loan is actually being received and your remaining balance is amortized on schedule as before the transaction.

travanx

I have to assume that boiler plate is for those who have ARMs that are just way too high. I also assume the amount of people with manageable mortgages is very low at this point.

CP

Does anyone know how to negotiate with the FDIC (on my behalf) to try to buy this loan out for pennies on the dollar?

CP

viperbob

Unfortunately Pong, you are the best customer to have your mortgage sold to another firm. You pay on time. That that means your mortgage is worth more. Buying out or reducing mortgages starts with one simple act. BE LATE WITH YOUR PAYMENTS. If you pay on time, there is no incentive for anyone to talk with you. Once you hit 60 days late, many mortgage holders have special groups designed to help customers. This can be forgiving payments, rate reductions, and even principle reductions. No one wants to foreclose on a house these days. That is why these groups exist, and why short selling is becoming more popular.

kdurg

Pong..... you're getting solid advice here.

Don't bother searching for replacement financing. Current Jumbo loans are priced near 200bps (2%) higher than your current note rate. You are not required to get a new loan.

Your note will be sold and you'll be advised who the new servicer is. All too often I've seen two areas to be concerned about:

1- Payments posted. Be sure you follow up on each payment just prior to and just after the note is sold. Many times the selling entity holds onto the payment prior to transfer and it's not posted to your account in a timely manner. Likewise, the new servicer may be delayed in boarding your loan on its system. In either case, these delays can cost you hundreds if not thousands of dollars in additional interest. If you are diligent you can get the new servicer on the phone and have them back date your payment(s) in the event these delays occur.

2) Escrows. Many times the new servicing entity botches up your escrow analysis and incorrectly enters when property taxes and homeowners insurance premiums are due. Be aware of when your county municipality collects taxes and your insurance company bills for its annual premium. Follow up with the new servicer to ensure these dates match when their escrow department plans to disburse.

Been in mortgage banking for 20 years and owned firm for last 11. Call me direct to cell if you have any questions or run into problems. 804-519-7018.

Good Luck !

ilko

Nobody will buy your loan at pennies on the dollar, that's the stupidest thing I've ever heard.

Nobody will refy at under 4.875%. Current loans start at 6.5%.

Nothing will change in your life, forget about this letter and move on.

TYNUSKT

This is a great thread and something I have been wondering about if my mortgage company went belly up. Thanks for the info everyone and thanks for throwing out the question Pong.

IamSMC

They might be "encouraging" you to refi because when you refi, it takes your low interest rate mortgage off the "low performing assets" for the potential sale.

If your a borrower in good standing, they can't force you to do anything. Whoever takes over this mortgage, they're obligated to continue the terms of the mortgage you agreed to with the lender at time of closing of the mortgage.

CP, don't give the letter another thought.

IamSMC

Even if the bank went belly up, the mortgage itself is an asset that can be sold to a new lender/investor.