QUESTION

Can my mortgage company sell my mortgage to another mortgage company after I discharged the debt in bankruptcy?

Asked on Aug 03rd, 2013 on Bankruptcy - Colorado
More details to this question:
In 2010, I filed for chapter 7 bankruptcy. I have never been late or missed a payment. I just recently received a letter from my mortgage company saying that they have sold my mortgage to another mortgage company. This seems very strange to me. Can they legally do this? Why would another mortgage company want to purchase a mortgage that has been discharged?
Report Abuse

7 ANSWERS

Yes, they can. The mortgage company can sell the mortgage, just as they can sell other assets.
Answered on Aug 19th, 2013 at 7:58 PM

Report Abuse
Bankruptcy Attorney serving Walnut Creek, CA at Alan E. Ramos Law Offices
Update Your Profile
Your discharge and ownership of the Note and Deed of Trust for your home have no relationship with each other. The Note and Deed of Trust contain the right for the lender to sell/assign the Note and Deed of Trust. When you received your discharge, it removed your personal liability for the Note. However, the holder of the Note and Deed of Trust still has its rights against the real property. As long as you remain current on the Note, you should have nothing to worry about; just make sure that you send your payment to the correct place (the Note and Deed of Trust may be sold, but they could maintain the same loan servicer or they could change servicers - make sure that you open all mail). This answer was provided as a public service to a question posed on the Law Q & A website. The answer is based on the information provided and is limited to those facts. Furthermore, the answer is based on California law and their application to bankruptcy law in California. Additional information could change the context of the question and materially change the answer.
Answered on Aug 05th, 2013 at 10:21 PM

Report Abuse
Bankruptcy Attorney serving Las Vegas, NV at A Fresh Start
Update Your Profile
It is not at all strange - in fact it is very common and it is entirely legal. The mortgage is a lien on your property which remains a valuable asset even after a bankruptcy filing. Different mortgage companies each have their own business model and many lenders will gladly snap up a mortgage at a discount on the gamble that you will pay & they will make money.
Answered on Aug 05th, 2013 at 10:20 PM

Report Abuse
Appellate Attorney serving Grosse Pointe Farms, MI at Musilli Brennan Associates, PLLC
Update Your Profile
It may be that even if the note was discharged the lien remains in effect.
Answered on Aug 05th, 2013 at 10:20 PM

Report Abuse
Personal Injury Attorney serving Glendale, CA at JT Legal Group
Update Your Profile
They can do it. The note itself has been discharged but the lien has not been.
Answered on Aug 05th, 2013 at 1:08 PM

Report Abuse
General Law Attorney serving Cherry Hill, NJ at Mark S. Cherry, Attorney at Law, PC
Update Your Profile
Yes they can legally sell the mortgage. The mortgage is the lien on the real estate. Your chapter 7 discharged your personal obligation on the Note, but did not release the mortgage lien on the property. If you ever want free and clear title, you will need to address the issue. Also, the mortgage lender has the right to foreclose if you are in arrearage. The foreclosure would be to obtain title to the real property.
Answered on Aug 05th, 2013 at 1:00 PM

Report Abuse
Deborah F. Bowinski
Yes. Mortgage loans are sold and transferred all the time.
Answered on Aug 05th, 2013 at 11:52 AM

Report Abuse

Ask a Lawyer

Consumers can use this platform to pose legal questions to real lawyers and receive free insights.

Participating legal professionals get the opportunity to speak directly with people who may need their services, as well as enhance their standing in the Lawyers.com community.

0 out of 150 characters