I am sorry, we are having problems with the chat service, in terms of your duties, when the lender files a chapter 11 bankruptcy, that means they will be restructuring their debts, that does not mean they will no longer exist. So the debt you have with them should still be paid, unless the Court sends you a letter that states otherwise.
The below is from the FTC. Regarding this type of matter.
When a mortgage company closes or files for bankruptcy, its customers may be
left wondering about the impact on their own loans. The Federal Trade Commission
(FTC) says consumers should continue to make their mortgage payments as usual.
The nation's consumer protection agency has several situation-based tips for
consumers who need to know what to expect in today's mortgage market:
If your lender files for bankruptcy after your loan
closes: Loans and the rights to service them often are bought and
sold. A mortgage servicer collects your monthly loan payments, credits your
account, and handles your escrow account, if you have one. If your mortgage
servicer is different from your original lender - and your original lender goes
out of business - continue to make your payments to the mortgage servicer by the
date they're due.
If your mortgage servicer files for bankruptcy or goes out of
business: It's very likely that a mortgage servicer that files for
bankruptcy will sell its assets under the supervision of the bankruptcy court to
another financial institution and transfer the servicing of your loan to another
company. A mortgage servicer that simply goes out of business probably would
transfer the servicing of your loan to another company as well.
How will you know if your loan has been transferred? Read your mail and your
email - and pay attention to phone calls and messages that deal with a change of
lender, a late payment, or a payment that wasn't received. To avoid a scam, the
FTC says, review the notices and call to confirm the new loan servicer before
you send a payment.
If your loan is transferred to another servicer:
Regardless of the reason for a loan transfer, you should get two notices: one
from your current servicer and one from the new servicer. The current servicer
must notify you at least 15 days before the effective date of the transfer -
unless you got a written notice at your settlement. The effective date is when
the first payment is due at the new servicer's address. The new servicer also
must notify you within 15 days of the transfer.
By law, the notices must include particular information:
- the name and address of the new servicer;
- the date your current servicer will stop accepting your payments;
- the date the new servicer will begin accepting your payments;
- telephone numbers for both the current and the new servicer that you can use
to call toll-free or collect for more information about the transfer; and
- whether you can continue any optional insurance, like life or disability
insurance, whether you need to do anything to maintain coverage, and whether the
insurance terms will change.
The notices also must include a statement that the transfer will not affect
any terms or conditions of your mortgage contract, except those directly related
to the servicing of your loan. For example, if your mortgage contract has an
escrow account to pay property taxes and insurance premiums, the new servicer
can't close the escrow account.
In addition, you have a 60-day grace period after a transfer to a new
servicer. That means you can't be charged a late fee if you send your mortgage
payment to the old servicer by mistake - and your new servicer can't report that
payment as late to a credit bureau.
The FTC advises all mortgage holders to
read their monthly statements. If your statement is late - even by just a few
days - call the mortgage company to track it down. Keep records of your
payments, including billing statements, canceled checks, bank account
statements, or online account histories if appropriate. If you have a dispute,
continue to make your mortgage payments, but challenge the servicing in writing
and keep a copy of your letter and any enclosures for your records. Send your
letter by certified mail, and request a return receipt, or send it via fax, and
keep the transmittal confirmation.
If you have an escrow account: An escrow account is
a fund held by your servicer. You pay into the fund to cover charges like
property taxes and homeowners insurance. Typically, your payments are included
as part of your monthly mortgage payment, and the servicer pays your taxes and
insurance from this fund as they come due. Even if your servicer files for
bankruptcy or goes out of business, it is responsible for making the escrow
payments in a timely way.
The Real Estate Settlement Procedures Act (RESPA) covers escrow accounts. If
your mortgage servicer administers an escrow account for you, it is required to
make escrow payments for taxes, insurance, and any other charges when they are
due. The mortgage servicer also is required to give you a free statement every
year that details the activity of your escrow account. This statement should
show your account balance and reflect payments for your property taxes,
homeowners insurance, and other charges. But it is your responsibility to review
the statement to make sure the appropriate entities and payments are made.
If one recipient of escrow funds lets you know that a payment is overdue,
call the others that are supposed to be paid from your escrow account - for
example, state or county governments for property taxes, insurance companies, or
homeowners associations - to make sure the funds are being transferred in a
timely way. The Department of Housing and Urban Development (HUD) enforces the
Real Estate Settlement Procedures Act. Contact HUD with questions or comments
about RESPA by email ([email protected])
or by phone(NNN) NNN-NNNN.
If your lender files for bankruptcy before your loan
closes: If you've been pre-approved for a mortgage and learn that
the lender has filed for bankruptcy, call to find out if or when the company
intends to make good on your loan. If the lender can't - or has gone out of
business altogether - start shopping around for another mortgage
The FTC works to prevent fraudulent, deceptive and unfair business practices
in the marketplace and to provide information to help consumers spot, stop and
avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP
(1-877-382-4357); TTY: 1-866-653-4261. Watch a video, How to File a
Complaint, at ftc.gov/video to learn more. The FTC
enters consumer complaints into the Consumer Sentinel
Network, a secure online database and investigative tool used by hundreds of
civil and criminal law enforcement agencies in the U.S. and abroad.
RESPA-related Inquiries and Disputes
Under the Real Estate Settlement Procedures Act (RESPA), your mortgage
servicer must respond promptly to your written inquiries. If you think you have
been charged a penalty or a late fee that you don't owe - or if you have other
problems with the servicing of your loan - continue to make your regular monthly
mortgage payment, and contact your servicer in writing in a separate
communication. Send your letter - including your account number and an
explanation of why you think your account is incorrect - to the customer service
address. Don't write your note on your payment coupon.
Timeline: The servicer must acknowledge your inquiry in
writing within 20 business days of receiving it, and take action within 60
business days. The servicer must correct your account or determine that the
accounting is accurate, and then send you a written notice of the action it took
and why, and the name and phone number of someone to contact for more
information or help.
In any case, do not subtract the disputed amount from
your mortgage payment. Some mortgage servicers may refuse to accept what they
consider a "partial" payment: they could return your check and charge you a late
fee, or claim that your mortgage is in default and start foreclosure