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  1. #1
    J E R S E Y S B E S T Jerseysbest's Avatar
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    So if a bank fails...

    http://www.businessweek.com/ap/finan.../D91TOQRG0.htm

    So, if you have over $100k in a savings account at one institution, and the bank fails, you run the risk of losing everything over the $100K amount thats insured by the FDIC.

    What happens if you have a mortgage with that institution? Do you still owe them?

    This guy who had over $100k in an IndyMac Bancorp Inc savings account also had a mortage and:
    ...was hoping to get 50 cents on the dollar above the federally insured limit, with the remainder possibly applied to his mortgage with IndyMac.
    Shouldn't he be like, "Give me my damn money or I'm not paying my mortgage"?

  2. #2
    Banned. ModoVincere's Avatar
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    the mortgage is bundled and sold to another service provider. The proceeds will be used by the failing bank to meet its obligations. You will still have a mortgage to pay.

  3. #3
    J E R S E Y S B E S T Jerseysbest's Avatar
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    Quote Originally Posted by ModoVincere View Post
    the mortgage is bundled and sold to another service provider. The proceeds will be used by the failing bank to meet its obligations. You will still have a mortgage to pay.
    Yeah I guess most of the debt will be sold to others, but when its sold, will they get full price for it?

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    Bankruptcy is basically a one-way street - when any entity goes under, they're relieved of their obligations, but this doesn't relieve people who owe them. If you want to get out of paying, YOU'VE got to declare bankruptcy.

    - Mark

  5. #5
    J E R S E Y S B E S T Jerseysbest's Avatar
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    Quote Originally Posted by markjenn View Post
    Bankruptcy is basically a one-way street - when any entity goes under, they're relieved of their obligations, but this doesn't relieve people who owe them. If you want to get out of paying, YOU'VE got to declare bankruptcy.

    - Mark
    I didn't think of it that way, and that makes a lot of sense.

  6. #6
    Squirrelly Member trsidn's Avatar
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    mark is correct. If you wish to keep the house, you have to pay the mortgage.
    Quote Originally Posted by Nicodemus View Post
    Yet more proof that I'm.. well, pretty much right about everything.

  7. #7
    GATC
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    Quote Originally Posted by markjenn View Post
    Bankruptcy is basically a one-way street - when any entity goes under, they're relieved of their obligations, but this doesn't relieve people who owe them. If you want to get out of paying, YOU'VE got to declare bankruptcy.

    - Mark
    And furthermore the people the bankruptee owe are going after *everyone* who owes their debtor to make sure they don't lose more than they already have.

  8. #8
    Banned. ModoVincere's Avatar
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    Quote Originally Posted by Jerseysbest View Post
    Yeah I guess most of the debt will be sold to others, but when its sold, will they get full price for it?
    depends on the average rating of the mtg's bundled, the avg. remaining length of time, etc. basically, it will be a discounted to PV cash flow transcation. In other words, it will be a fair market deal and the loans sold just as if the bank was not in trouble.

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    It used to be in the 80s, during that bailout, the FDIC covered people with more than $100,000 in their accounts, even when it wasn't required to.

    I seriously worry about the US's financial future now that that protection isn't being done.

  10. #10
    old and in the way grueling's Avatar
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    As a former banker, I recall that there has never (since the creation of FDIC insurance) been a bank failure where the depositors were not fully paid, even over the $100,000 limit.

  11. #11
    Senior Member DannoXYZ's Avatar
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    Isn't that a two-part thing? The first $100k comes from FDIC. Then if there's any assets left over after all depositors are paid their $100k, then that's used to pay amounts above $100k.

    also what's this latest thing about the Bush, Paulson and the Fed agreeing to bailout private stockholders with the tax-payer's money?

  12. #12
    K2ProFlex baby! ilikebikes's Avatar
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    Quote Originally Posted by DannoXYZ View Post
    Isn't that a two-part thing? The first $100k comes from FDIC. Then if there's any assets left over after all depositors are paid their $100k, then that's used to pay amounts above $100k.

    also what's this latest thing about the Bush, Paulson and the Fed agreeing to bailout private stockholders with the tax-payer's money?
    Pretty simple, dont keep more than $100,000 in any one account.
    You see, their morals, their code...it's a bad joke, dropped at the first sign of trouble. They're only as good as the world allows them to be. I'll show you. When the chips are down, these...These "civilized" people...they'll eat each other. See, I'm not a monster. I'm just ahead of the curve

  13. #13
    JF1
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    Senior Member JF1's Avatar
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    Quote Originally Posted by DannoXYZ View Post
    Isn't that a two-part thing? The first $100k comes from FDIC. Then if there's any assets left over after all depositors are paid their $100k, then that's used to pay amounts above $100k.

    also what's this latest thing about the Bush, Paulson and the Fed agreeing to bailout private stockholders with the tax-payer's money?
    Where did you read this? That will really piss me off.
    J
    Good times.

  14. #14
    Senior Member wernmax's Avatar
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    Some "judges", hahaha, are even saying the lender has to have the note, hahaha, to keep collecting on the mortgage.

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