This might be an odd questions but

Discussion in 'Random Ramblings' started by Rhett&SarahsMom, Jan 27, 2009.

  1. Rhett&SarahsMom

    Rhett&SarahsMom Chillin' With My Peeps

    May 8, 2008
    what happens to ALL the mortgages, car loans etc if the US falls into a depression and the banks really tank?

    Not just the mortgages in foreclosure now. But all of them?
     
  2. redhen

    redhen Kiss My Grits... Premium Member

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    good question...[​IMG] i dont think they can touch your house unless you default on the loan...but..who knows what they could do...[​IMG]
     
  3. DuckLady

    DuckLady Administrator~~~ BYC Store Support Staff Member

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    I am sure there will always be someone to pop up and take the mortgages and your payments. [​IMG]
     
  4. Wifezilla

    Wifezilla Positively Ducky

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    I have no clue....but we're going to find out really quick, aren't we?
     
  5. ranchhand

    ranchhand Rest in Peace 1956-2011

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    I have wondered too, but I agree there will always be someone demanding my mortgage payment. Rats.
     
  6. debilorrah

    debilorrah The Great Guru of Yap Premium Member

    I am sure there is a back up plan SOMEWHERE.....
     
  7. mom'sfolly

    mom'sfolly Overrun With Chickens

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    Home ownership rates will fall as credit becomes less and less available. More people will default on mortgages that are upside down, house prices will fall, credit will loosen and it will all go around again. JMHO

    Interesting page with homeownership rates for the last 10 decades. In 2000 over 2/3 of Americans lived in their own homes, but at the end of the Great Depression home ownership was under 45%.

    http://www.census.gov/hhes/www/housing/census/historic/owner.html
     
  8. Rhett&SarahsMom

    Rhett&SarahsMom Chillin' With My Peeps

    May 8, 2008
    did they have mortgages like they do now back before the Great Depression? I know I could look this up. But the kid is driving me nuts today. And I get to take her to work with me tomorrow!! good times.. good times
     
  9. congdon476

    congdon476 GaLLiNa LOcA

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    Unfortunately they will keep doing what they are doing- print more money. Then our dollar will loose value, then other countries will look at buying out our failing banks and companies and next thing you know there aren't any large companies still owned by the US. If the government keeps buying them out then you end up with a socialist nation (government controls the companies now so they make the rules). But I'm rather pessimistic with the current situation... hence becoming more self sufficient. I think the bottoms going to fall through if the government keeps nosing in the free market. Our system won't work because the government wasn't meant to be the controlling factor. The more companies they buy out, the less control we have. [​IMG] It's one thing for the government to create government jobs (lets build new interstates and fix up our current ones, employ more park rangers, etc.) it's another thing to demand that privately held companies create them or keep them when it's not economically feasible.

    But- yes, eventually everything will come back around... but it might not be for years and our country might not be the same.

    ok- no more soap boxing.
     
  10. Rosalind

    Rosalind Chillin' With My Peeps

    Mar 25, 2007
    In the 1930s, banks started calling in loans when they were desperate for cash. IOW, you'd get a notice saying that they were changing the terms of your loan and wanted all their money, right now, or forfeit your house. Couldn't pay, too bad.

    I don't recall whether or not legislation was passed to change that. I know they can still do it for credit cards and lines of credit, but I don't know if they are still allowed to do that for mortgages. They are currently doing that for some credit cards, informing people that they are reducing their credit limit and want higher minimum payments or the balance in full right away. Heard it on the news on NPR. [​IMG]

    ETA: When the banks did this in the 1930s, they found it was a bad idea in the long run--in a Depression, you can't sell a house for anything, so they weren't getting any money out of it. I realize CEOs are not the brightest bulbs in the box and are having to re-learn this 75-year-old lesson with the recent batch of foreclosures, but I doubt they would seriously call in people's notes if they were current on payments. They can only feasibly call in people's notes if the bank hopes to retain some semblance of solvency; if they do so when there's no hope, then the assets default to auction in bankruptcy court, I believe. So hypothetically, just before the bank fails, it calls in all the money it's owed to try and re-capitalize as much as it can. It will call in things like credit cards first, because it's a lot easier to get a few thousand out of people than several hundred thousand. When it gets so desperate that it's calling in mortgage notes, then the assets of the bank (including, at that point, the homes it has foreclosed on) are auctioned and the proceeds distributed amongst creditors. If you're current on payments though, it's easier for the bankruptcy court to sell your mortgage note as an asset in its own right to DBS or Lippo Group than to attempt to repossess and sell as a piece of real estate.
     
    Last edited: Jan 27, 2009

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