Since we had the subprime problem, many mortgage companies went bankrupt. The largest mortgage lender in the country Countrywide Financial (CFC) announced today that they drew down their entire $11.5 billion credit line. The analogy for this move in personal finance is like a person who normally uses credit cards only for convenience all of sudden maxing out ALL of their credit cards.
It’s a signal of distress. The credit lines are supposed to be a backup. They are there but you are not supposed to use them unless there’s something seriously wrong. There’s talk of bankruptcy. Usually before someone goes bankrupt, they draw down all their credit lines. WorldCom did the same to their $2.65 billion credit line in 2002, about 2 months before it filed for bankruptcy. The credit line draw down from Countrywide today is more than 4 times as large as what WorldCom did.
I’m not saying Countrywide will go bankrupt. I don’t know that. But one can’t help but ask what happens when your mortgage lender goes out of business. I wrote about what happens when a bank goes out of business in February. That was from a depositor’s point of view. What if you are a borrower?
First the bad news. You will not be let off the hook on your mortgage. Even if the lender goes out of business, you are still responsible for paying your mortgage. Someone else will take over the bankrupt company’s assets (the loan to you) and demand payments from you. If you don’t pay, they will take your house. Sorry, you are not going to get a reprieve.
Now the good news. Your loan term will not change. If you have a fixed rate mortgage, your rate will remain fixed. If you have an ARM, it will adjust according to the index and the original schedule. You may have to send your payment to a different place, but as long as you pay by the original loan terms, nobody can change the terms on you and force you to pay more. Nobody can call in the loan and force you to refinance either.
In the end if your mortgage lender goes out of business, it’ll be a non-event for you for the most part. You will not benefit from it. Nor will you be negatively impacted financially. Tax reporting may get a little messy. The bankrupt company may not issue the 1098 form timely. Your loan may get punted from one place to another. There’s not much you can do about that. Just keep your eyes on payment notices. Keep paying your mortgage and send your payments to the right place.
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Raymond says
I have a mortgage with a mortgage broker who when out of business, never sent me a bill statement and I can’t find a successer, is been over 15 years and no one calling.
Larry says
I will bet it is FirstPlus Financial Inc. Am I right?
Jane Garcia says
I am trying to refinance and I’m being told i have a 2nd with First NLC Financial for 41k back from 5/2006. They close down in 08 and i have never received a statement, letter, calls or anything. That mortgage is not even on my credit report. Only my 1st mortgage was sold to BOA but BOA said they only have 1 mortgage for me. I have contacted MERS and they couldnt help me either. I have been researching for 2 weeks and now i cant even refinance because of this 2nd mortgage still showing on title. I have plenty of equity and i will pay it but who is the new mortgage company. No one knows. So what happens in this situation..are we screwed
Israel Juarez says
Hello Jane,
I find myself in your exact situation. Unfortunately, I do not see any reply to your post. Wondering if you worked out this situation, any tips would be great.
Thanks,
Neicy says
Since I purchasrd my home in 1994 from national city mortgage in Növember in 1994, it was transferred to PNC bank in 2006, to Nation Star bank in 2017, to Mr.Cooper bank in 2017 and Rush Moore bank in 2018. My problem is each bank infleated it figures and now is demanding I pay up or they will foreclose on my house.
Jon says
How are each of the banks inflating the balance
P says
My lender went out of business. It never showed up on court day. The clerk told me that’s good news! Soon a servicing company called to offer me a loan modification. I got it modified & made a lower payment. The deed,however, is still listed under the bankrupted company. I continue to make my monthly payment to this mortgage company, who does NOT have the deed. Should I continue my payment? Should I claim a pay-off status, since the deed is still under the bankrupted company? Please advise, if you can.
Phyllis says
You need to call them. I don’t relate to your issue but you could ask if you can offer a settlement for 40% or more
Phyllis says
I’ve been paying on my mortgage for 20 years and still owe 19,000 that is way over what it’s worth. My morgage is with Ditech and they are trying to file chapter 11. They want let me refinance because my mortgage is more than it’s worth. The company is owned by investors. I will never get a mortgage with investors again. I’m stopping my payments at this time to see what happens. If this pertains to anyone please reply to me. When my mortgage is payed of 7 years from now I will have paid $90,000 for a $32,000 mortgage, that’s insane.
Dennis says
Hi Phyllis,
My mortgage lender is DITECH as well, i just received a letter from the bankruptcy regulating agency telling me DITECH is going for chapter 11 and that if I want to fill a claim form I should get an attorney on the proper way of doing this. It doesn’t say anything else (I guess is too early to start doing something).
Have you been told anything from them? Please keep me posted. TY
Alicia Milani says
i can relate. i am thru ditech and i am so confused….
MrWheel-Estate says
That’s how home loans work. Look up amortization calculator, $150k loan for 30yrs at today’s rate will run you approx $275k at the end of 30 years… Not sure we could expect different results.
And I heard Ditech is not approving settlements without valid financials and hardship reasons. Received 2 denials.
I am wanting to do the same and settle for less, so let me know where you got your info and I will attempt it.
Phyllis says
Every time I call Ditech says they’ll send my information to the settlement department they haven’t denied me yea. Did you send them a hardship letter? We have to prove it. You keep me posted and I will keep you posted.
Phyllis says
I receive this letter yesterday April 6th 2019. Get back to me.
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Denis says
Your attached JPG files didn’t come up. I got into the website DITECH (or better yet the website the bankruptcy court ordered for this case), I found basically the same info in letter I got, the claims have to do with creditors who performed some service for DITECH and didn’t get pay.
I also researched this scenario with various bankruptcy sites and it doesn’t seem to be any risk of losing our equities since our loans are usually sold to another lender order by court.
phyllis says
My letter wouldn’t pull up I got a message about it sorry I will try to get back to you with a response I’m at work and very busy.
barbara H.L. says
I, too, just received a chapter 11 order from the bankruptcy court of NY. I originally had my loan with Countrywide who then sold it to Greentree, who then sold it to Ditech. Ridiculous. I found that Ditech was an overly aggressive “lender” that charged me ridiculous penalties for late payments. So much so that it was making It nearly impossible for me to pay it in a timely manner. I was playing catch up every month. I paid every penny of the mortgage payment plus penalties and finally caught up. I called their pay by phone number the next day and there was a 600 penalty even though I paid the whole amount the evening before. I’m wondering if the “Notice Of Claim” form that I, as a consumer, “may file it not file “ has anything to do with their aggressive loan management. Has anyone else had a similar experience with Ditech? Thanking you in advance…Barbara
Clara Wilks says
Yrs, I could not believe that since Ditech has filed Chapter 11 that I have to pay $900 for their attorney fees. I don’t feel it’s right that Ditech can penalize me for them filing Chapter 11. I filed Chapter 13 and Ditech did not pay for my attorney fees. I was told by bankruptcy attorney that a federal judge signed off and approved those charges since the Bankruptcy Reformation. My payments are current and all of a sudden I am being billed for this lender’s attorney fees. Who does that. That is not fair to the debtors. When I filed Chapter 13 myself, I was advised by my bankruptcy attorney not to include my house since my reason of filing was due to a judgement for a car that I got tricked and scammed by a salesman, so I surrendered the car and the lender sold it at auction price at an under value price. The car was brand new and the bankruptcy attorney said since they were charging me $15,000 for a vehicle that they auctioned off at a under value price then I could prevent the judgement by filing Chapter 13. There was never discussed with me about an option to either pay the mortgage myself or pay it to the Trustee. He said that the house would not be included. About 6 mos into my bankruptcy I got a letter from Ditech that they were filing Chapter 11 and I did not have to respond. Now I’m being billed for their attorney fees and my bankruptcy attorney says they cannot pay it because it was never included in my plan. What can be done about these unscrupulous charges?
Phyllis says
Call Ditech they are letting me make a settlement on my mortgage. I did a search and it said to start out with a 30% settlement then you can negotiate from there if they don’t except it . I’m working on my letter today .
Dennis says
Hi Phillys,
Can you explain a little more what that settlement is about?
You mentioned before that you owe only $19,000 on you loan but couldn’t refi because it wasn’t worthy? Now you say you’ll be able to settle?
Pardon my asking but I just want to understand better.
Thank you
Phyllis says
Hey Dennis. I meant Ditech said my Mobil home is not worth what I own on it so I could not refinance it unless I put my land up with it. I would not do that. Monday I called Ditech and they said I could send some info that’s in the letter I received and I could offer a settlement so I’m working on my letter and I’m going to off 40%. If you need the need the number let me know
Phyllis says
Hey Dennis how is things going with Ditech. I
Sandy says
Hi Phyliss. I would definitely like that number. Do you know if they are allowing you to do a settlement because your loan is under water or because of the bankruptcy? I would appreciate the number you are calling. Thank you!
Phyllis says
I’ll give it to you sorry I had trouble posting my reply’s. I’m at work
Tony says
Hi Phyllis
My name is Tony I received the same letter as everyone else did regarding the bankruptcy I would also like that number you are calling to make a settlement offer on your mortgage.
Monica says
Hello, were you able to post that phone number to offer a settlement? I could not see it in the reply. Thank you.
Phyllis says
I don’t remember my letter saying about bankruptcy . Mine was a collection notice . I’m waiting on a response about paying off at 40% . I’ll sent it when I get home
Linda Burns says
We have two homes financed by Ditech. They sent me two new account numbers and told me to make payments using those account numbers from now on. But I received no bill in the mail!!!! Then, the bankruptcy things came in the mail. So, I am to keep paying to a different place, different account numbers, with no acknowledgment of my payments? Something seems odd!
Phyllis says
Call and see if they will offer you a settlement
Robert says
Same here ditech is a rip off
sonny says
tried to make payment for my Mortgage today and found out that my account was closed for unknown reason….guess what? Yes, i have my home financed with Ditech!!…I do pay my Mortgage every month, but i guess i cant make it happen this month. Please let me know what i should do. Thanks
Phyllis says
They didn’t go out of business., the court let them file chapter 11. I have been able to make my payments online. I make my payments online. Make a account with Ditech and you can pay your payment out if you bank account. I’m still waiting on a response about them settling for 40% of the balance owed. I have faxed 3 letters and they still want another. I’ve payed way over what my mobile home is worth. I’m going to talk to a attorney to ask what Ditech can do if I stop making payments. Keep me posted about your payments.
Phyllis says
If your on Facebook can I send you my phone number in messenger. I live in Alabama and would like us to talk about Ditech
Phyllis says
I would see what they do. How old is your mortgage mine is 21 years old
Maggie says
I tried to make my house payment and couldn’t. I have not received anything. I was able to make a payment last month. What iam i suppose to do now
MHpro says
Try calling Shellpoint Mortgage Servicing. They acquired most of Ditech accounts. I do know Ditech is shutting down and no longer servicing mortgages.
Phyllis says
I would wait until they contact you. I received a letter that said I will be making my payment to the other company. I have lost it so I’m hoping to receive another letter.
Corby says
I went thru same situation u going thru I call and curse them out payments gets higher instead going down..what’s your next move with ditech
Phyllis says
I posted last year about settlement with Ditech but they would not do it. Ditech has closed down. I’m thinking about stopping paying my mortgage to see what happens. I was thinking yesterday we signed a contract with Ditech not whoever took over the company. I was looking through my filing cabinet and they had sent me a signed contract that had my account number and the name on the contract was someone else’s and it had their Social Security Number on it. I’m sure it is probably too late to contact anyone it’s Been 20 years ago. Another thing I’m thinking is we signed our contract with green tree. If anyone has stopped paying on their mortgage let me know. Back when I tried to settle my banker told me they don’t want my mobile home so that’s why I’m going to stop paying on it to see what happens.
Phyllis says
posted last year about settlement with Ditech but they would not do it. Ditech has closed down. I’m thinking about stopping paying my mortgage to see what happens. I was thinking yesterday we signed a contract with Ditech not whoever took over the company. I was looking through my filing cabinet and they had sent me a signed contract that had my account number and the name on the contract was someone else’s and it had their Social Security Number on it. I’m sure it is probably too late to contact anyone it’s Been 20 years ago. Another thing I’m thinking is we signed our contract with green tree. If anyone has stopped paying on their mortgage let me know. Back when I tried to settle my banker told me they don’t want my mobile home so that’s why I’m going to stop paying on it to see what happens.
Donnie says
Im with dietech also. Credit report says payed off with 0 balance. I still owe like 23k. What gives? Who do i pay now?
Leslie Wells says
We were involved in a tornado. The settlement check was mailed to us. Dietech sent us the check and now is out of business. NewRez took over how do we get them to sign the check over. We keep getting the run around.
Phyllis says
I would keep calling the company that took over your loan.
Phyllis says
I would keep calling the company that took over your loan.
Avis says
Bad company I am dealing with the same thing for over 3yrs
Phyllis says
I’ve been with green tree and Ditech for 22 years. I’m going to see if Shellpoint will finance what the value of my home appraised at which is $10,700. I’m going to call when I get Up the nerve. Are you going to see if they will let you refinance. Let’s stay in touch.
Phyllis
Amy says
We are trying to get a mortgage history from Ditech but all of the phone numbers are not reachable. We are selling our old home(financed by Ditech orginally) and buying a new home with a different lender. Can anyone give me a number or address to try and get information?
MH Man says
Was your loan paid off with Ditech already? If it was not then it transferred to new lender. There is no numbers for DITECH, last known address is 301 Bayport in Jacksonville FL.
phyllis willmon says
I contacted them by email and they said they were working on my request. If I were you I would find another mortgage company.
Mira Herman says
I’ve had a second home loan taken out in 2007 through CENTRAL MORTGAGE. In 2009 I was in a Chapter 13 bankruptcy and the loan was supposed to have been removed from title. I understand they do get paid some other way. At the same time CENTRAL MORTGAGE sold some of their loans to AVEST CENTRAL MORTGAGE and then went bankrupt. My loan is not found through AVEST CENTRAL MORTGAGE.
Now 13 years later I am trying to sell my house and the loan is still on title listed through the original lender CENTRAL MORTGAGE who is not in existence since 2010. Apparently some of CENTRAL MORTGAGE loansm the ones that did not end up as AVEST CENTRAL MORTGAGE were sold to GMAC, which then sold SOME of their loans to OCWEN, SOME of their loans to DITECH and then GMAC restructured the rest of their loans into ALLY FINANCIAL. No-one in any of these banks can find the loan and tell me who owns it in order to remove it from title. DITECH is the last bank I’ve been trying to reach but since they filed for bankruptcy any telephone number I’ve called has not been a working number.
Does anyone know how to reach DITECH? Has anyone had a similar experience with a loan that has been dismissed but never removed from title and there is no bank claiming it. (there’ve been no loan invoices sent to me since 2009). Until this loan is found I cannot sell the house so now there is a foreclosure and a trustee sale date is scheduled in two weeks unless I can find the loan and remove it from title.
MH Man says
Ditech no longer has working numbers and the last known address is 301 Bayport Ave, Jacksonville FL.
Also, all remaining loans of Ditech were service transferred to Shellpoint Mortgage out of SC.
mira herman says
Great, thank you. I do know Shell Point as they were the servicer on the first loan of the same bank, though since then it had been transferred to Rushmore. Brilliant, thank you so much for the fast response.
In your experience do you think writing Ditech can elicit any response and information?
Since you know so much may I ask you another question? The title company picked up the first loan on this house as having been a loan from 2007 with the loan balance from 2007. It appears that my payments over the last 12 years and the existing balance which is $140,000 less than the original loan have not been reported by the various banks the loan has been transferred among( the loan has been bought and sold twice each year since 2007, sometimes to the same banks over and over). Anyway do I just call the existing loan servicer Rushmore who took the loan servicing out of Shell Point just recently and ask for their reporting? Is it better to ask Shel Point? If you don’t know can you perhaps make an educated guess. Thank you for your help.
phyllis willmon says
Ditech sold out to Shell Point. Do a Google search and you should find the number there there may be a long wait time
Mrs.Avis Hurd says
so much mess!!!! From Greentree to Ditech, having to file bankruptcy, after compleating 3yrs of payment plus whatever Ditech said. Shellpoint holds the note now, but Ditech who no longer exist stills wants me to send them 300$ a month until my mortgage is paid off in 10yrs. “Who is holding my deeds”
Phyllis says
I haven’t had that problem. I would make a online account with Shellpoint and email them about the problem. You can also call but there may be a long hold time. One more thing what did your attorney say?
Sandra says
My Uncle husband dealing with. Ditech also he’s been paying on his trailer for 20-something years him and his wife separated but the trailer is in her name and now. Ditech has closed and sent the mortgage over to Shell Point she also filed bankruptcy before the mortgage was sent over to Shell Point we called to verify the information but now they won’t give us any information because my uncle is not on the contract and being she filed bankruptcy she can’t call to verify the information for us because when you file bankruptcy you can’t call the debtors sign out here my uncle Stitch not knowing if our account is at that Shell Point Place but yet we’re supposed to send them money didn’t get any letters in the mail about the bankruptcy and them transferring over to them so now we’re behind on Archer payment and she don’t seem to care what happens do we keep paying someone that we all know our mortgage is with us because she can’t call and they won’t tell us anything my uncle is paralyzed on one side and I have to take care of him so we’re trying to figure out what to do and not lose his home without having to give me an attorney we just don’t know what to do cuz she keep paying or just stop I mean since she filed bankruptcy should be she should be making the payment on the thing now with all of her consolidated loans because it was in her name not his if that makes any sense we’re just at a standstill and he’s very scared he’s going to lose his home if anybody can give us any information or help us decide what maybe we should do or get an attorney if we should cuz I’ve been reading all of these comments about ditech I read up on the Internet about it some but this what y’all were talking about about ditech right down my alley concerning my uncle okay thank you appreciate the help have a good day
Phyllis says
When my father passed away his credit card had a high balance. We did not have to pay it off because we didn’t record the will. The credit card company sent as $1600. I don’t think they can come and get the mobile because she passed away, and no one was ion the mortgage with her . If it was me I would most definitely contact a attorney to see what they say. Keep me posted on what happened and good luck keeping your moms place.
Phyllis says
My best advice is to contact an attorney to see what they say or try to work with your uncle’s wife she may be willing to sell the property to you or if you’ve been paying on it that might change the whole situation. I hope this might help a little bit but my situation was different in both marriages. Keep me posted if you object I really like to hear what the outcome is. Good luck!