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Did you or someone you know get a letter about DiTech’s Chapter 11 Bankruptcy?

You’re not alone. We’ve been getting lot’s of phone calls from folks asking what it is and what they need to do about it.

First, a little background…

DiTech, the parent company of RMS (Reverse Mortgage Solutions) is one of the largest servicers of reverse mortgages in the United States. As part of it’s bankruptcy proceedings it is required to provide certain notices to all of it’s stakeholders. This letter (below) is that notice. There is a pretty good chance if you have a reverse mortgage, your loan is being serviced by RMS.

Is there anything I need to do?

If your loan is being serviced by DiTech or RMS there is nothing you need to do. Just like with a traditional mortgage, if your lender or servicer can no longer service your loan, it will “sell” the servicing rights to your loan to another company. This can happen by choice or when a servicer closes it’s doors or files for bankruptcy protection as is the case here. The impact to you as a borrower is no different. Servicing will transfer behind the scenes, it should all be seamless to you.

What is the impact to me?

If your servicing gets transferred, you will receive notice of the transfer, your statements will be mailed by someone new and the number you call to reach the servicing department will change but that’s about it. Nothing about your loan contract changes. Whoever services your loan is still bound by all of the same guidelines and loan documents you signed at closing. The deed of trust, note loan agreement, etc. are contracts. Even if someone else purchases the contracts, the terms do not change, all of that stays with your file as long as your loan remains outstanding.

If you have an FHA HECM reverse mortgage, your loan is also insured by the federal government, HUD will step in if necessary to ensure you you continue to receive funds according to the terms of your loan.

Bottom line…

With regard to this issue, there is most likely nothing you need to do or be concerned about and I am happy to answer any specific questions you may have. That said, I am not a lawyer and cannot give legal advice, as always if you have serious concerns you should should seek professional legal counsel.

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