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09-15-2008, 08:44 AM
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#1
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Dryer sheet aficionado
Join Date: Sep 2007
Posts: 26
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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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09-15-2008, 08:57 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2003
Posts: 5,105
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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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Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
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09-15-2008, 09:06 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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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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The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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09-15-2008, 09:17 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2003
Posts: 5,105
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Quote:
Originally Posted by 2B
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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Why is this an indignity? I don't get it.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
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09-15-2008, 09:52 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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Quote:
Originally Posted by dex
Why is this an indignity? I don't get it.
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Maybe the right word is stupidity. The FDIC could have zerod out the loss against the mortgage but doesn't.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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09-15-2008, 09:56 AM
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#6
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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Quote:
Originally Posted by cletis
Who do you pay your mortgage payments to if they go under?
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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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09-15-2008, 10:22 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
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Quote:
Originally Posted by cletis
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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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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Vietnam Veteran, CW4 USA, Retired 1979
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09-15-2008, 10:35 AM
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#8
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Moderator
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 25,340
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Quote:
Originally Posted by Nords
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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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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When I was a kid I wanted to be older. This is not what I expected.
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09-15-2008, 11:04 AM
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#9
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Dryer sheet aficionado
Join Date: Sep 2007
Posts: 26
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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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09-15-2008, 11:55 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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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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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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09-15-2008, 02:13 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2003
Posts: 5,105
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Quote:
Originally Posted by 2B
Maybe the right word is stupidity. The FDIC could have zerod out the loss against the mortgage but doesn't.
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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
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
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09-15-2008, 02:26 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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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.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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09-15-2008, 05:42 PM
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#13
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Dryer sheet aficionado
Join Date: Apr 2006
Posts: 49
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Quote:
Originally Posted by dex
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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Is that true? Are CD's insured by FDIC? I thought that just covered checking and savings deposits?
Rick
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09-15-2008, 05:50 PM
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#14
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gone traveling
Join Date: Aug 2006
Posts: 994
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Quote:
Originally Posted by rickier55
Is that true? Are CD's insured by FDIC? I thought that just covered checking and savings deposits?
Rick
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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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09-15-2008, 08:07 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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Quote:
Originally Posted by rickier55
Is that true? Are CD's insured by FDIC? I thought that just covered checking and savings deposits?
Rick
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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.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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09-16-2008, 07:33 AM
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#16
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
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Quote:
Originally Posted by 2B
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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EDIE at FDIC.Gov may clear some of this misinformation up.
FDIC: Federal Deposit Insurance Corporation
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Vietnam Veteran, CW4 USA, Retired 1979
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