I have my mortgage with New Century, which has filed for bankruptcy. How does this affect me? How concerned should people be about the financial soundness of their mortgage company? Might my interest rate rise?

New Century's bankruptcy filing may affect you a lot less than you expect. The terms of your mortgage are set by contract and can't be changed no matter what happens to your mortgage company, says Chuck Cross of the Conference of State Bank Supervisors. That also applies to adjustable-rate loans. "Every adjustment is preprogrammed, so people don't have to be concerned," says Cross.

It's also likely that New Century has sold your loan to another company or will do so in the near future. Mortgage originators, whether financially healthy or not, typically sell their loans to other investors. In that case, you may end up sending your check to someone else. Just make sure you continue making your payments so that you don't default on the loan.

Borrowers who recently applied for a loan through New Century will need to find a new lender. And that may not be easy for people with poor credit who have to depend on subprime lenders. Those companies may either beef up their standards or go out of business.

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