Your application is being processed, closing is not too far away and bam! Your lender files for bankruptcy or announces it's pulling out of the mortgage business.

Here's what to do:

Step 1. Call and ask if it will proceed with your loan. Even companies that have stopped accepting new applications may continue to fund borrowers that have been approved and locked-in their rate.

Step 2. If not, ask whether customers' applications are being transferred to another mortgage company that's agreed to honor the terms of their loans. If it has, call the new lender right away. Staying the course as much as possible will save time and money, helping you to avoid repaying application, credit check, appraisal and other processing fees.

Step 3. If you're being left in the lurch, contact the seller and ask to extend the closing date while you find a new loan. In this housing market, it's highly unlikely they'd walk away from a committed buyer who has already been able to qualify for a mortgage.

Step 4. Start shopping for a replacement loan. Our extensive database of mortgage rates across the country is a great place to start. Your bank or credit union, which already has a history with you, is another good place to look.