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Old 09-15-2008, 09:44 AM   #1
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What if ??

What happens to a mortgage if say Washington Mutual goes under? I paid off my mortgage 2yrs ago (thank the lord) and it was through Wmu. Who do you pay your mortgage payments to if they go under? Cletis
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Old 09-15-2008, 09:57 AM   #2
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You keep paying WM until you are told by the company that assumes your mortgage where to pay the money.
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Old 09-15-2008, 10:06 AM   #3
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Your performing mortgage becomes an asset for the FDIC to use to partially recover the cost of guaranteeing deposits.

The ultimate indignity is that if someone had a $200,000 CD in a failed bank and a $200,000 mortgage with the same bank would end up with a $100,000 and the same $200,000 mortgage.
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Old 09-15-2008, 10:17 AM   #4
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The ultimate indignity is that if someone had a $200,000 CD in a failed bank and a $200,000 mortgage with the same bank would end up with a $100,000 and the same $200,000 mortgage.
Why is this an indignity? I don't get it.
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Old 09-15-2008, 10:52 AM   #5
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Why is this an indignity? I don't get it.
Maybe the right word is stupidity. The FDIC could have zerod out the loss against the mortgage but doesn't.
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Old 09-15-2008, 10:56 AM   #6
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Who do you pay your mortgage payments to if they go under?
I think mortgage payers should be more worried about what happens to the escrow account for property taxes & homeowner's insurance...

In mid-1980s Charleston SC I received a property-tax default notice. That was my first warning that my mortgage company had "forgotten" to pay the property taxes of about 20,000 of their customers while they scrambled to make payroll were "upgrading" their escrow-account system. In a stunning coincidence, my homeowner's insurance company was about to let me know that they were having a little problem with their premium payments too. Did I mention that at the time I was a bachelor on day 15 of a 90-day submarine patrol?

The whole saga, pulled out of a foot-high stack of mail awaiting me on my return, was very interesting reading. Everything settled down without my intervention but since then I'm not a big fan of escrow accounts.
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Old 09-15-2008, 11:22 AM   #7
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What happens to a mortgage if say Washington Mutual goes under? I paid off my mortgage 2yrs ago (thank the lord) and it was through Wmu. Who do you pay your mortgage payments to if they go under? Cletis
Aside from the Escrow Account problem (and how many that paid off the mortgage left some escrow balance "on the table"; but that is another question).

I hope that with such a recent payoff you got a "release" when you paid it off. It would really be a "issue" if all of a sudden you started getting late payment notices for a mortgage that was paid off. I am sure it would eventually get settled properly but the paper work, headache, and possible damage to your "credit rating" would not be nice.
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Old 09-15-2008, 11:35 AM   #8
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The whole saga, pulled out of a foot-high stack of mail awaiting me on my return, was very interesting reading. Everything settled down without my intervention but since then I'm not a big fan of escrow accounts.
Same thing happened to me when I bought a house after the divorce. I'd get nastygrams from the County and the insurance co. because those hadn't been paid. The first time I refinanced (for a lower interest rate, no equity pulled out) I skipped the escrow and had the bills sent to me. That way I knew they'd get paid.

And in the meanwhile, I collected the interest on the "escrow" in savings.

Add up the annual bills, divide by 12, and that's the number that has to go into savings to pay them. I have no idea why that's so hard for so many people. But I'm married to an accountant.
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Old 09-15-2008, 12:04 PM   #9
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We recieved escrow $ back when we paid off the mortgage. I do remember trying to take care of the escrow ourselves but they wouldn't allow us to. Cletis
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Old 09-15-2008, 12:55 PM   #10
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You may need those mortgage releases when you sell your properties too. Took me two days and about 20 harassment calls to my old credit union before they got around to finding and faxing it. And they were still in business.
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Old 09-15-2008, 03:13 PM   #11
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Maybe the right word is stupidity. The FDIC could have zerod out the loss against the mortgage but doesn't.
I don't get this either - why would the FDIC due such a thing.
The CD is a debt of the bank insured by the FDIC up to 100K.

The mortgage is a debt from the homeowner to the bank - FDIC no involvement in the transaction.

What am I missing?
txs
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Old 09-15-2008, 03:26 PM   #12
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They're doing it because they can.

Orrr...

They're doing exactly what they said they'd do. Insure you for $100k and assure you're liable for the full debt you committed to.

I think the key question is why you'd have a $200k cd at a bank that was only insured for 100k.
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Old 09-15-2008, 06:42 PM   #13
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I don't get this either - why would the FDIC due such a thing.
The CD is a debt of the bank insured by the FDIC up to 100K.

The mortgage is a debt from the homeowner to the bank - FDIC no involvement in the transaction.

What am I missing?
txs

Is that true? Are CD's insured by FDIC? I thought that just covered checking and savings deposits?

Rick
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Old 09-15-2008, 06:50 PM   #14
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Is that true? Are CD's insured by FDIC? I thought that just covered checking and savings deposits?

Rick

As long as the CD is at an FDIC insured institution.

IRA CDs are insured up to $250,000.


http://www.fdic.gov/consumers/consum...ial/index.html


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Old 09-15-2008, 09:07 PM   #15
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Is that true? Are CD's insured by FDIC? I thought that just covered checking and savings deposits?

Rick
Bank CDs are FDIC insured up to $100K by the FDIC. In IRAs the limit grows to $200K but I don't trust it because the CDs I buy are in a brokerage account. How would the FDIC know? It's too easy to stay under $100K.
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Old 09-16-2008, 08:33 AM   #16
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Bank CDs are FDIC insured up to $100K by the FDIC. In IRAs the limit grows to $200K but I don't trust it because the CDs I buy are in a brokerage account. How would the FDIC know? It's too easy to stay under $100K.
EDIE at FDIC.Gov may clear some of this misinformation up.

FDIC: Federal Deposit Insurance Corporation
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