A bankruptcy law-practicing FrontBurnvian has the answers. The bottom line: In Texas, pay your mortage, no matter who owns it:
I suspect you are correct that the mortgage was long ago sold. Most people’s mortgages are held by entities with names like “Lehman Brothers Asset-Backed Residential Pool NE-212-B, LLC.”
The statements you receive every month are not from the Mortgagor but from the Servicer. If those are coming to you from Colonial, then they will just start coming from someone else. Colonial’s failure would not have any effect on your mortgage because it’s probably been assigned and re-assigned.
The right to start a foreclosure proceeding does not HAVE to lie only with the Mortgagor. Most of the “Master Pooling and Servicing Agreements” permit the Servicer to handle the entire process. The Servicer may never have seen the note and don’t know where to get the note, but have a legal document authorizing them, pursuant to the note, to initiate foreclosure when their internal records indicate a delinquency.
If you simply stop paying, they will not “take you to court.” The court is not involved.
Most of the “produce the note” mortgage defenses you see all over the news don’t work very well in Texas because we are a non-judicial foreclosure state. Neither the Mortgagor nor Servicer actually have to show anything to a judge prior to the foreclosure, with a small exception for those homeowner’s who themselves initiate a lawsuit over it (usually trying to get a TRO stopping the sale).
