I'm concerned about this because the hubby will surely lose his job when the economy finally collapses and we still have a mortgage on our home to pay. If the banks bite the dust, then are mortgage holders free and clear to keep their homes without having to pay for them anymore?
No, not free and clear. Not sure how they would take payments though.
I don't think you can make any sort of blanket statements.
I don't think "the banks collapsing" means every bank, in every state, will all magically cease to exist.
Is it possible that the economy goes tits-up and a bunch close? Sure. National Bank Holiday to sort out the mess? Possible.
Every bank shuttering it's doors and sending it's workers to the soup-line? Doubtful.
Even if there's a major event that sends the banking industry into chaos and a bunch of banks go bellyup, I don't think you can make a blanket statement that all banks will respond with XYZ measures.
Could it happen where a mortgage holder ends up essentially squatting on their property? Sure. Would I hold my breath and plan on spending my mortgage payment? Nope.
ETA: And, as always, SHTF is not one, specific, monolithic event. You simply can't make sweeping generalizations that ABC will happen when XYZ takes place.
If you think that come SHTF you are gonna jock up in all your kit and be a death-dealing one man army, you're an idiot - izzyscout
^
Good Answer.
The other thing to consider, is how long the event is going to last. From the safety of you home, listening to CB's you may think it is a permanent or semi permanent event. but what happens if in 6 months, they get the country back up and running. the first thing they will want to do is start collecting their money again, including back payments and interest.
Banks are big business, driven by big money. Their main goal is going to get back on top, no matter the cost or the hardships to you, me, or the other guy
IMO
The euro-crises in Europe is really getting beyond bad. It's estimated that the euro could collapse within 10 days. By Christmas for sure. U.S. banks are so intrinsically in bed with the European banks, that when they (the European banks) fail, it is only a matter of time before the banks here fail. We are talking about a crisis many times worse than the banking crisis of 1008. That crisis took out several large, TBTF banks (Lehman Bros. for example) and will certainly wipe out a much bigger slew of them again. If that happens, it's just a bad chain reaction of failing events from lack of product transport to mass job losses. It will be an apocalyptic event of pretty much biblical proportions. That's why I asked the question if such a thing should (and most likely will) happen, will we be off the hook as far as mortgages are concerned? I don't think the banks will be allowed to return from the ashes to screw us again. It will be a total paradigm change.
When a bank fails, the FDIC steps in to transfer that banks assets to another bank (i.e., your mortgage). The FDIC was created by Congress.
The chair is against the wall. The chair is against the wall. John has a long mustache. John has a long mustache.
That's what's supposed to happen when a bank fails. However, on this grand scale of bank failure, the government as we have known it will also go down taking the FDIC with it. And since BofA did it's evil little trick of putting all it's debt onto the customer's side of the column, that makes the FDIC responsible for insuring it's stolen monies. Do you think that will leave any insurance money left for us average Americans? Better get your bucks out before they fail. There will definitely be runs on all the banks here after Europe fails.Originally Posted by TEOTWAWKI13
The only way I see banks failing to the point of homeowners getting to burn their mortgage payment booklets with glee is that the entire country descends into total anarchy and remains so for a long time.
Otherwise, the banks and .gov will figure out a way to get that money from you. Period.
That's the way I see it.
ETA: Molly is wise to note having some cash on hand is always a good idea, especially if the general populace goes apeshit and runs on the banks.
If you think that come SHTF you are gonna jock up in all your kit and be a death-dealing one man army, you're an idiot - izzyscout
I see "all banks fail and we no longer owe any mortgage, credit card, car payments debt" apocolyptic WISHFUL THINKING all the time. I hope I win the lottery too, since I never buy a ticket...too Scotch for that...I see my chances of either scenario as being fairly low.
In the end....you can bet, that someone, somewhere is going to become your new Lord, and you a serf to something.
The best thing you can do, in my opinion, is pay your bills, and don't get os many you are sitting around hoping the sky will fall so you can be a rich chicken little. If the banks failed that catastrophically...for that long a duration...the money you saved on your mortgage wouldn't be worth more than as toilet paper anyhow.
The ONLY way I see anything even remotely such as this happening, is we have some sort of technology databank erasing catastrophic event...solar flare, emp, asteroid type event...in which case...guess what...the least of your worries is going to be your mortgage.
Banks are slowing selling themselves to the government by taking handout just like GM and there isn't a damn thing that we can do about it.If you foreclose on your house... guess who will own it?
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