What happens to your mortgage in a social collapse?

Discussion in 'Other Political Issues' started by modernpaladin, May 27, 2019.

  1. modernpaladin

    modernpaladin Well-Known Member

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    Prolly no jobs, prolly no payroll, prolly no mail or internet. Prolly little value to money, and no one available to collect or process it.

    But also prolly no forclosure notices, no LE to enforce eviction, no courts or lawyers.

    What happens when order is restored? Do the banks grant g grace period? Do we all suddenly get foreclosure notices? Wouldn't that cause more collapse? What do you think would happen?
     
  2. Collateral Damage

    Collateral Damage Well-Known Member

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    Social collapse would likely also lead to the collapse of virtually everything... utilities included, so unless you are off grid before the collapse, you'll not care about having a house that you have a mortgage on.
     
  3. jay runner

    jay runner Well-Known Member

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    In that situation whatever you have you must hold by force, including your provisions and your life, and you likely have to remain on the move to minimize violence (you can only carry so much ammo, and they can burn your house with you in it). If you live through all that, then you can start to sweat the small stuff as the chaos fades: like who owns what and do the grocery stores ever reopen, as there are no known answers to these problems except Darwin.

    Bartering would replace paper and electronic money for a long, long time.

    To live in those conditions you must love death, and always awake from rest expecting to kill and survive.

    Better them dead than you.
     
    Last edited: May 28, 2019
  4. kazenatsu

    kazenatsu Well-Known Member Donor

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    It depends.

    You still owe the money on your mortgage, even if nobody has any money.
    The bank will most likely seek to collect when the catastrophe is over, foreclosing on your house.
    This is likely even if it means overall lower profits for them. We saw what happened during the Housing Crisis. Bank leaders don't want to admit there were massive losses, so they will delay writing off the losses as long as possible. And also making special deals to lose money opens them up to legal liability from the shareholders, so that's another reason they wouldn't adjust the original terms of the mortgage.

    In the event of hyperinflation, that may be another story. Unless perhaps if you have an adjustable rate mortgage.
     
  5. kazenatsu

    kazenatsu Well-Known Member Donor

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    In many areas of the country, ordinary people are up to their eyeballs in debt on their mortgage. If some disaster ever hits and the economy collapses for a period of time, these people will really struggle, and very likely lose their houses.
     
  6. modernpaladin

    modernpaladin Well-Known Member

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    Very true.

    Though I was more asking what happens after social collapse. After order is restored.

    Say you manage to survive with your property under your control. How likely is it that the bank will just come take it anyway?
     
  7. scarlet witch

    scarlet witch Well-Known Member Past Donor

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    I believe government will intervene at some point. If defaults reach crazy levels government is likely to place a hold on repossessions and give bailouts to those institutions that need it to stop the economy from haemorrhaging jobs. You will have large scale unemployment at that point, people will need food and shelter, crime will skyrocket... I doubt you will see apocalyptic scenes unless it happens due to an apocalyptic event, like nuclear attack, attack on power grid with long term blackout, long term water issues etc.

    If you look at the last 70 years, after the second world war, we just keep pushing the economy further, every time we reached a point where banks are at the point of collapse (several times during this period) government rescues them and we just keep piling the debt on. Of course this rescue is also the exact point the rich gets richer and the poor gets poorer...
     

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