What happens to your home/mortgage if there were a total financial collapse?
David W asked:
I’m not talking about what we’re seeing now. What would happen to my home/mortgage if all the other countries in the world collected the U.S.’s IOU’s and made the dollar worthless? They couldn’t ask for money. Would they foreclose on your house. It wouldn’t make sense because they couldn’t sell it to anyone else. What would happen? I’m also assuming everyone would immediately take their money out of the bank to, so without fractional reserve banking and no fiat currency value most institutions would fail. Would the house default to the owner? Any ideas?
I’m not talking about what we’re seeing now. What would happen to my home/mortgage if all the other countries in the world collected the U.S.’s IOU’s and made the dollar worthless? They couldn’t ask for money. Would they foreclose on your house. It wouldn’t make sense because they couldn’t sell it to anyone else. What would happen? I’m also assuming everyone would immediately take their money out of the bank to, so without fractional reserve banking and no fiat currency value most institutions would fail. Would the house default to the owner? Any ideas?
Tags: Currency Value, Fiat, Iou
June 30th, 2011 at 3:18 am
O.K. This is only my point of view, because there is no legal stance that would ever/could ever or had dealt with such a meltdown.
If the US ever did collapse beyond any comprehension we know about….The $ could indeed become worthless….Countries that , lets say, were owed trillions of dollars, could ask to have collateral give against the loan……but it is so unlikely, it is not worth considering. The US would be forced to sell/lease out viable assets…….oil reserves,oil resources, gold etc. Railways and of course Land e.g. Alaska.
At this stage, you own property would in effect be worthless, market collapse.You would owe money to the mortgage lenders, but it is likely that company would have collapsed as well. What third party would want to take on/buy these debts outstanding, when repayment was going to be unlikely…..
I would imagine, if this dire positon did every happen, you would have a huge civil unrest and it would
be every man for himself and a brand new order would have to grow from the ashes, which would take years. Imagine what happens after a nuclear explosion…. Keep smiling though
July 2nd, 2011 at 5:18 am
The house would never default to the owner as the debt would always have some value to someone.
If you had a $50000 mortgage on the property and the bank collapsed then another institution would always buy up that debt as there is always someone in the world with money. So maybe the Bank of China would buy that debt from your bank for $10000, you would still then owe the Bank of China $50000 because they would have bought up the first legal charge to the property.
July 4th, 2011 at 9:40 pm
David you might consider research THE GREAT DEPRESSION and the world reactions then. It would most likely be much worse than then, and even what we are experiencing now.
July 7th, 2011 at 11:56 pm
They could only foreclose on your house if they first bought the bank and then you somehow violated your contract. You would still owe the mortgage.
July 9th, 2011 at 9:45 am
The loans that fund the US government ARE NOT CALLABLE. That is, no one has the right to ask for repayment earlier than stated on the debt. Also, your mortgage has nothing to do with the US debt.