O/T Failed banking system

All i hear is gloom and doom from the media. My question is if all the banks fail, and all the other world economies fail, what the hell happens to my mortgage. Do we wipe the slate clean and all start over again?
I'm really serious with my question. Anybody know?
On a farming note it won't quit raining here in south Ga. What a mess! Keep putting off going up to my little farm in Illinois cause it's crap up there too. Guess i might wait till may and just put in corn this year.

Take care all

Farmer

i would think that before they all fail, the banks will be calling in notes. For a positive note on the economy visit this site:

http://www.townhallforhope.com/?ictid=sptlt2

Not all banks are in the crapper.

I belong to a bank in Michigan that still has all its branches open, (non closed yet) And if your bank closes then your mortgage will be bought up by another bank and then you will own them the $100,000 or whatever.
The debt note is simply transferred.
I have thought of the same thing but I am not that lucky to have my mortgage forgotten.

Warren Buffett made a comment years ago: It goes like this.....The very basic concept of a bank makes money, You loan out money at 7% and pay 3% in interest to account holders. The 4% differential is what the bank gets.

RIght now, i'm a fan of digging a hole and burying my money.

454 as soon as my GM stock breaks even thats what i'm doing

They can't "call in" your mortgage note any sooner than due, unless you default. In other words, you are entitled to keep making payments according to the terms of the note until paid- 30 years out, if thats what the terms are.

On the other hand, if you have an annual "operating" loan that comes due every year, but you always "roll over" the remaining balance into a new note for next year, don't count on that happening again if your bank fails. They will sell the note, and the buyer may not be comfortable with ag lending- would then just tell you they're not renewing, and you've gotta look elsewhere.

Banks are getting a little less stringent about exercising their rights on loans that are performing, however- they've got enough trouble with non-performing loans without trying to make trouble for those that are still performing. For instance- most home mortgages have a "due on sale" clause- if you sell your house, loan must be paid in full, the buyer can't assume it without bank's permission (which was never given- they want a new loan, with new loan fees). Had a client wanting to buy a place in foreclosure- would catch up the back payments, and continue making payments. I called the lender about permission- he said they can't give written permission, but unofficially have adopted a "don't ask, don't tell" policy- if the loan gets caught up and taken out of foreclosure, and someone continues to make the payments, they're not going to get nosy about what happened. "We're up to our a$$ in alligators- there's enough bad ones that we don't have the time or the inclination to go around poking the good ones".

Don't think there's much of a chance of your GM stock breaking even, is there? Even a bankruptcy isn't going to solve their problems- simply too deep a hole. Only hope for auto industry in America is for Ford to somehow hang in there, and keep encouraging foreign automakers to set up plants in "right to work" states, where unions can't strangle them.

Hard to believe the buyers attorney would sign off on that at a closing.

I am the buyer's attorney, and believe me, "I ain't signin' off on nothin'"! I sent her a three page letter detailing all the ways this deal can go sideways (there are several other "issues" as well), advising her not to do it, and telling her I'll assist her in making sure the papers are correct and protect her as well as possible under the circumstances, but beyond that, she's on her own. Ethics reules for attorneys prohibit us from advising someone from doing something illegal, but can advise them of the possible consequences if they choose to move forward, and can assist them to the extent possible to minimize the exposure. What she's doing isn't "illegal" per se- just violates a contract, which violation the other party may choose to ignore.

Why is is that external_link has put all kinds of strings and stipulations on the car company bailout (including forcing gm's ceo out) but NONE on AIG or the banking industry bailouts?

Mike, I sure would not want to encourage foreign automakers to be given more free land and incentives to build their plants over here. Isn't that one of the problems that we are having with the Chinese and Japanese taking money out of our country and then lending it back to us. They aren't building vehicles over here for our benefit, they are doing it to get our money.

[i:654c4848f0]" they are doing it to get our money"[/i:654c4848f0]

To be fair, though, that's what GM, Ford and Chrysler are doing, too. That's what any company does. We consumers benefit because they can make the product cheaper and better than we can make it ourselves.

Nancy,
Get a hld of the list of campaign contributors and you will understand why bho and many Senators are so easy on AIG, Citibank, Fannie/Freddie Mac and several other failed financial institutions.

The crooked Wall Street bankers pretty much run things. With the mark to market rules now being relaxed,they can now legally cook their books and make all those toxic assets look great.

Mike's right. A mortgage is a contract. Unless you agree to sign a new contract, they are bound by the original terms. I had a credit union try to change the payment and interest rates on a car loan. When I said no and threatened to call the state bank examiners, they very quickly saw it my way. Mortgages are bought and sold daily. If the institution holding your mortgage goes under, there are others out there that will pay pennies on the dollar for it. The mortgage on my place has been sold 3 times in the 2 years I've owned my place.

Many years ago, before I came over from "the dark side", I was a banker at a locally owned, independent national bank.

Best advise I can give is to continue repaying the money you borrowed to purchase your property from the financial institution regardless of its situation or ownership.

The mortgage that is secured by your property will always be "held" by "somebody" until you pay it in full.

If your financial institution is "bought out", make sure you correctly identify the new owner(s) and make your payments to them.

Always, always, always get a receipt for your payment from the new owner(s).

Also keep all statements from your financial instituion regarding your mortgage.

Your "paper trail" from the financial instituion is your best defense in a worst case scenario.

Most folks that work at your local financial institution are decent people.

A financial institution ( corporation ) is a bloodless, heartless, unconscionable, artificial "person" created by law.

Now I will make a shift from "preachin" to "meddlin".

Adjustable rate mortgages are a "b!tch".

SOB (Sorry Old Banker) that came up with that scheme should have been drawn and quartered!

No win situation for the homeowner.

SOB (Sorry Old Banker) that conjured up home equity loans should be buried up to his neck next to fire ant mounds!

No win situation for the homeowner with leveraged equity.

I can remember when it was unlawful in Texas to secure a loan with a lien-free homestead.

Folks had plenty of "free and clear" land, but could not borrow money against it.

Better stop for now because forum etiquette does not allow politics or religion.

I am getting close to "losing my religion" and possibly making some "politically incorrect" remarks.

In all earnest, make your payments and keep your receipts.

I do hope this helps.

Mike,

You obviously know a lot more about this subject than I do. I haven't had a mortgage for a long time, however, the last one I had (paid off in 1998) had a clause that simply said they could call the loan whenever they felt like it. Maybe that's not normal, but my understanding at the time was that virtually all mortgages had that clause. It was in the fine print details, but it sure enough was in there.

Tom in TN

You're right, but it's much worse than that.
Many of them, and I do mean many, have themselves or had spouses have very lucrative well paying jobs with these same organizations.
If the media were honest with the American people, it wouldn't stand.

Amazing, i have not heard one word about the "lawmakers" aka the clowns we elected, being responsible for making rules that force the corporations into doing stuff like shipping work overseas. The media must have only one biased opinion on "lawmakers" otherwise people might start to understand who the real crooks are.

The problem is our officials, and we the people voted for them, so it is the peoples fault.

What with all the free trade agreements, there's not much we can do about foreign corporations competing with us. But any of 'em that want to build plants in US so our workers get the jobs, more power to them! I'm thankful that the Chinese are willing to lend "our" money back to us, because without it, we'd be in much more dire straits.

I don't believe the standard form Deed of Trust that is used on loans these days has that clause- I need to check- but there's not a judge in the land that's going to allow a lender to "call" a performing loan in the current economic climate. They'd get laughed out of the courtroom.

Another common misconception is among heirs- that when Dad dies, they can "call" the real estate contract that he held, and "get the money" (heirs come in many different types, but all have one thing in common- they want to "get the money", preferably by day before yesterday). No can do- again, its a contract, binding on heirs, successors and assigns, so they're stuck splitting the $300 per month among the 5 kids, for the next 25 years. Unless they sell the contract at a discount.

Mike, I thought that I heard lately that the Chinese were questioning if they really wanted to lend our money back to us. Maybe if they get away from the dollar and get a new currency that better favors them it will be OK.