If a bank goes bust, what happens to Morgages they secure?

[Grant76]

Just as the title says?

Do other banks take over the loans, Government?

[Mr E]

Grant76 said:

Just as the title says?

Do other banks take over the loans, Government?

I'd guess the administrators call them in so they can pay the banks creditors.

[trooperiziz]

All the mortgages get written off and you get your house for free!

[davido140]

the debts will be sold (generally at a very knock down price) to another bank willing to take them on.

[dazren]

They'll be sold to another mortgage co who will continue to collect tthe money. The sell price will go in the pot for distribution to creditors.

[rich1231]

davido140 said:

the debts will be sold (generally at a very knock down price) to another bank willing to take them on.

And then the marginal ones get called in

[B16JUS]

trooperiziz said:

All the mortgages get written off and you get your house for free!

lol you wish it was that easy !

[TankRizzo]

Is it a given that there will always be another institution willing to take them on?

[KingRichard]

TankRizzo said:

Is it a given that there will always be another institution willing to take them on?

There will be for a price. Administrator just gets the best price possible. If a mortgage is transferred to another bank you will continue paying in exactly the same way. You won't even notice anything has changed.

There is a clause in all mortgage contracts that gives the lender the right to sell your debt at any time. It doesn't affect your rights, or payments, or direct debit even...

[Grant76]

TankRizzo said:

Is it a given that there will always be another institution willing to take them on?

Kinda what I was thinking, with the economic climate how it is, I can't imagine there will be that many of the bigger institutions willing to take the gamble of so much more debt..

[john_r]

The administrators will sell your mortgage to the highest bidder... I did some consultation for a company that brought several mortgage 'books'. The difference is these people are not banks, so all they care about is collecting your debt, not you as a customer or your future 'worth'. Typically only two defaults will result in legal action to re-possess...

If you check the small print on a mortgage agreement, you'll also find that with enough notice they can change the terms of the agreement so the first thing a collections business will do is serve notice to change or remove any terms that are to your advantage.

Apart from that, nothing to worry about...

[turbobloke]

Was there not a post some while back about Barclays being suspended too? What's that all about - given they're buying up bits of LB and AIG, they don't seem that fragile - to themselves at any rate?

[KingRichard]

turbobloke said:

Was there not a post some while back about Barclays being suspended too? What's that all about - given they're buying up bits of LB and AIG, they don't seem that fragile - to themselves at any rate?

Well I'm trying to secure asset finance through barclays and they have gone completely schtum! Great credit profile, never missed a payment, always ahead of pyment schedule etc... they don't seem to want new debt. Surely that's how they will trade out of this though... that is after all how banks make money isn't it?

[john_r]

KingRichard said:

turbobloke said:

Was there not a post some while back about Barclays being suspended too? What's that all about - given they're buying up bits of LB and AIG, they don't seem that fragile - to themselves at any rate?

Well I'm trying to secure asset finance through barclays and they have gone completely schtum! Great credit profile, never missed a payment, always ahead of pyment schedule etc... they don't seem to want new debt. Surely that's how they will trade out of this though... that is after all how banks make money isn't it?

Try RBS, they're actively looking for new business, but just not advertising the fact because they want low risk business. If you call them they'll put you in touch with the local Assett Finance office who will assign you a named account manager. Much better than dealing with a central office or call centre with rigid interest rates and 'the computer says...' attitude.

[KingRichard]

john_r said:

KingRichard said:

turbobloke said:

Was there not a post some while back about Barclays being suspended too? What's that all about - given they're buying up bits of LB and AIG, they don't seem that fragile - to themselves at any rate?

Well I'm trying to secure asset finance through barclays and they have gone completely schtum! Great credit profile, never missed a payment, always ahead of pyment schedule etc... they don't seem to want new debt. Surely that's how they will trade out of this though... that is after all how banks make money isn't it?

Try RBS, they're actively looking for new business, but just not advertising the fact because they want low risk business. If you call them they'll put you in touch with the local Assett Finance office who will assign you a named account manager. Much better than dealing with a central office or call centre with rigid interest rates and 'the computer says...' attitude.

Thanks. On the phone to them now

[john_r]

KingRichard said:

john_r said:

KingRichard said:

turbobloke said:

Was there not a post some while back about Barclays being suspended too? What's that all about - given they're buying up bits of LB and AIG, they don't seem that fragile - to themselves at any rate?

Well I'm trying to secure asset finance through barclays and they have gone completely schtum! Great credit profile, never missed a payment, always ahead of pyment schedule etc... they don't seem to want new debt. Surely that's how they will trade out of this though... that is after all how banks make money isn't it?

Try RBS, they're actively looking for new business, but just not advertising the fact because they want low risk business. If you call them they'll put you in touch with the local Assett Finance office who will assign you a named account manager. Much better than dealing with a central office or call centre with rigid interest rates and 'the computer says...' attitude.

Thanks. On the phone to them now

Any joy?

[DKL]

So could you arrange to "buy" your own mortgage at a knock down price and then refinance it?

[Bee_Jay]

DKL said:

So could you arrange to "buy" your own mortgage at a knock down price and then refinance it?

What will you 'buy' it with????

[MitchT]

Bee_Jay said:

DKL said:

So could you arrange to "buy" your own mortgage at a knock down price and then refinance it?

What will you 'buy' it with????

Could ask the government for a handout. Would only seem fair in the current circumstances!

[Uncle Fester]

Some individuals might be able to refinance themselves.

The auditors will probably be looking to sell a complete mortgage book. Inevitably, some of the individuals on that book will be better risks than others. If the firm has gone bankrupt then it probably has mostly bad ones.

If someone who is a good risk acts as an individual and finds refinance with another lender then they could approach the administrators and buy the mortgage at a knockdown price.