Economic collapse and Mortgages

[paddysdaddy]

DesertMarine: Could you please share which country you have chosen for your out-of-US BOL? We promise not to flood your chosen country with trolls
Your concern about the taxation in the US is exactly what some of here are thinking, IMHO.
Thanks in advance.

[Wayson]

Originally Posted by zatoichi

I would like to think that way.

The reason why I raised the point was that I had very similar thoughts about the impending collapse back in 1983.

Unemployment was at an all time high and the high spending on the military was creating excessive spending that did not have the same multiplier effect that most other spending might create. At one point Defense Secretary Casper Weinberger was asked if he loved his country.

That was how polarized it was at that time.

It was with that backdrop when a Republican friend asked me that question. My (late) friend did point out in the backdrop of history that things do get better over time. He stressed the overall strength of the economy.

On this point, he had a point and time proved him right.

A valid point. I'm well aware that in the past panics have always been overblown and unvalidated by real-world events.

I won't point a finger at any specific year and say that things WILL melt down here. But if you look at the history of all fiat currencies, they never end well. The one thing that they have in common is that they all DO end. Ours will be no different; unbacked money is simply too great a temptation for governments to abuse.

Come a day sooner or later, something will happen. Maybe not a complete collapse, but certainly a re-valuation of the dollar.

[aponymous]

Originally Posted by zatoichi

I would like to think that way.

The reason why I raised the point was that I had very similar thoughts about the impending collapse back in 1983.

Unemployment was at an all time high and the high spending on the military was creating excessive spending that did not have the same multiplier effect that most other spending might create. At one point Defense Secretary Casper Weinberger was asked if he loved his country.

That was how polarized it was at that time.

It was with that backdrop when a Republican friend asked me that question. My (late) friend did point out in the backdrop of history that things do get better over time. He stressed the overall strength of the economy.

On this point, he had a point and time proved him right.

No one is right every time.
America seems way more polarized now than it was in the 80's and income inequality is much more drastic. America has lost standing as a global super power. Things are very different today than they were in the 80's.
Some feel we've hit peak oil, some don't. Either way, I don't think one can doubt that if we have not hit peak oil, we are certainly closer to it now than we were in the 80's.

[America's Patriot]

If you have a mortgage and don't pay it, the banks will come and take it. Whether you live under a bridge or at Camp Fema is up to you I guess...

[HeadInSand]

Originally Posted by America's Patriot

If you have a mortgage and don't pay it, the banks will come and take it.

Absolutely! This same thread/question gets reposted/asked roughly every 4 months or so around here.

In the Great Depression, tons of people lost their houses for the very same reasons people are losing their houses today -- they levered up (e.g. put little to no money down) and then things collapsed right out from under them.

Make no mistake about it -- large debts won't conveniently be forgotten about, no matter what happens. If you owe big money on a house and find yourself unable to pay, and even your lender goes belly up, you can be certain that debt will be sold off to the next highest bidder and someone will eventually be knocking on your door. Debt and debt collection is a very profitable business, for those involved.

[Tackleberry41]

Yes under our current system, you don't pay your mortgage eventually there will come a point where they foreclose and your kicked out. But right now with the system still actually functioning, it takes what 18 months to go thru that process. A friend in Fla it took over 2 years almost 3 before there came a date of get out or we put your stuff in the yard.

That is all dependent on the system working. If there was some sort of dollar collapse, all that would come apart. How many of those big banks would actually survive? So somebody would have to go and sort thru the files and figure out who isn't paying what. What kind of mess would that be to try and sort out, how long would it take, who would even do it?

Foreclosure involves the legal system, imagine the backlog of cases they would have. I was in city hall not long ago about a business license, and they had this huge stack of boxes marked 'foreclosures' okay lets call it a pallet. Right now they are way behind, now 10x that problem. Foreclosure also involves the local sheriff, where I live he probably knows just about everybody here, its a small town. A foreclosure here or there he will go along with, but half the county, unlikely. Forcing old people he goes to church with out of their homes with no where to go, as he is also supposed to foreclose on their kids house to, just don't see it happening. And there also the issue alot of people are not going to be very happy about it, they gonna send the SWAT team to every foreclosure, just in case.

Somebody somewhere might have one of those neat little 3 ring binder plans the government seems to have for everything. But how many plans actually work exactly as you want? What sort of logistical nightmare would it be to relocate half the country to camps somewhere so collapsed banks can take possession of all the property thats theirs. Then what are they going to do with it? Stuff like that is all built on the idea that the 'system' will be there to make it happen. Hyperinflation, would render money useless, how you gonna pay the court clerks, they gonna foreclose on their own homes? Cops gonna keep showing up to work if you can't pay them, or what you pay them won't buy anything. And I doubt anybody can say there is enough active, reserve, national guard, coast guard auxillary, cub scouts, whatever to enforce any sort of martial law or what ever you want to call it everywhere all at once.

[Sigma]

Originally Posted by 2wheelslave

For some, this is like a big infected cyst that needs to be lanced. It'll be painful, but best in the long run. The slowly declining rat-race is not sustainable personally, and we suspect that it is not sustainable nationally or economically either. So the end of that age may offer a mixed blessing.

I agree and also...Do you really want this to keep going on...?
Look at how we have killed so much of the ecosystem in just the last 50 years.
And does anyone really think we have to keep drilling, polluting, killing, tormenting, and strip mining to maintain our 'high' standard of living?

Considering that we are a constantly growing population, living on a planet that has oil as its main energy solution...yes.

If you want to bring back Mother Nature and continents covered in verdant old growth forest, we need to trim about three billion people off this rock.

[iiioxx]

I think in a total collapse of the U.S. financial system, mortgaged homeowners would probably not need to fear mass evictions/foreclosures. If the dollar collapsed, the first two things that would happen would be:

1. Declaration of a national bank holiday of indeterminate duration, followed by the suspension of all financial markets. All assets would be frozen, all transactions halted. You can't pay a mortgage if you can't write a check, and they can't cash it.

2. Shortly thereafter, nationalization of all financial institutions operating in the U.S. would take place and your bank accounts, mortgages, etc., will be under the control of the U.S. government.

After that, the government's prerogative would be to stabilize the economy and maintain social order. You don't achieve that by kicking millions of people out of their homes. In fact, doing so would likely just incite revolution. However, don't think that debt will just be wiped away or anything. What's more, you may find yourself under a whole new set of terms (e.g., you can't sell your home, mortgages might be "adjusted" to account for hyper-inflation/devaluation, etc.). So, no one should view this potentiality as a get-out-of-jail free card.

[maat]

Originally Posted by zatoichi

I would like to think that way.

The reason why I raised the point was that I had very similar thoughts about the impending collapse back in 1983.

Unemployment was at an all time high and the high spending on the military was creating excessive spending that did not have the same multiplier effect that most other spending might create. At one point Defense Secretary Casper Weinberger was asked if he loved his country.

That was how polarized it was at that time.

It was with that backdrop when a Republican friend asked me that question. My (late) friend did point out in the backdrop of history that things do get better over time. He stressed the overall strength of the economy.

On this point, he had a point and time proved him right.

If you remember, Reagan lowered taxes substantially and cut deductions. In the Depression, Hoover and FDR raised taxes. So, how much faith should we have considering Obama is following Hoover and FDR?

[m4bako]

http://www.youtube.com/embed/wYFJmm0...owinfo=0&rel=0

[prankster]

What kills me are certain "financial experts" online or tv or whatever who advise against paying off your mortgage assuming you have the cash to do so. They site current interest rates, the mortgage tax deduction or whatever as reasons not to pay it off. I say BULLROHR-if you can pay it off DO IT NOW! Nothing feels better than owning your home free and clear and not having to be concerned that some banker is going to take your home if you miss payments.

[m4bako]

In part is our decision you took the loan, I did too in 2007 is a big beautifull house in one of the best neighbors, but a year ago I realized my mistake so I saved and took a 401k loan and bought a house in cash only 1/3 the cost of my big house, outside the city with land and animals permit and zero crime actually it was a distress manufactured home, for my family is going to be a big change and maybe sacrifice for me is a blessing, my kids will learn better, now I just need to save 5 to 10 years in taxes but in gold or silver.

[prankster]

Originally Posted by 2wheelslave

My personal view is it will be intentional and rather imminent
The simple fact is our economy is based on unlimited and continuous growth which of course is impossible to have go on for any length of time.

I view it is going to be intentional for a few reasons mainly of which considers the fact that continuous growth is impossible and if I can see it is going to collapse then the central banks obviously know. Furthermore, if one looks at the history/operation of the Fed.Reserve and our banking practices it would seem apparent (to me anyway) that it was actually designed to collapse. I highly doubt that somebody with the vast amount of resources that the an elite has would allow the pieces to fall naturally. Simply too much risk that way.

As far as mortgages, it is my guess that in a sudden freefall the mortgage wouldn't matter BUT If there is a slow economic decline leading into a collapse then most people (including me I guess) would lose their house. In fact, I was 2 weeks late on a payment last month an Chase Mortgage sent my mortgage into "default" meaning I owe 3 months + penalties. How in the world would I ever be able to pay for that if I was unemployed/underemployed.

Most people spend their entire adult life trying to attain more 'money' and more trinkets as they feel that is a true measure of success. However, if one is born into the world with all these things, given the natural human drive, they will strive to attain something and that something is often power if history is to tell us anything.

Just my 2 cents...

Doesn't that tell it all? Two weeks late and they're sending you into default-so now you say they wanted three payments plus penalties! Folks if you can pay it off do so! Keep prepping!

[KCFirepower]

Originally Posted by desertmarine

This is the EXACT reason why I maintain a International BOL i.e. excessive taxation from the U.S. Government. Even though ALL of the lands that I own are paid for free and clear I still have to worry about taxation, EXCEPT on my International BOL. There is not a single copper penny of taxes to be paid. The weather is wonderful ALL year long and I am away from city life and people. I am here now and will be adding a new flock of sheep to the homestead real soon. My West Texas homestead is similar to where I am now, but I have to tell you let me miss several tax payments and you know what happens...Foreclosure.

Please share. I have an international BOL option, but I am wondering if there is anything better and closer. I own a home in the states (no mortgage) but would love a tax free "vacation" option.
You don't have to give specifics of the location, but I am interested in which country. My current option is in Asia, but I do not like the idea of flying if TS is in the middle of HTF.
This is an excellent discussion btw, but I think it there is truly a big enough economic collapse it will result in two scenarios:

1. The bankers will use it to fleece as many folks as possible and take houses (i.e. robo-signing in extreme). Many people who are fine on their mortgage will be tossed, and some will just have their houses and businesses completely stolen.
2. The govt will step in with some sort of huge relief program like the depression era. A new WPA is about the best we can hope for, and it will just kick the can farther down the road.

[Cryptkeeper]

Originally Posted by JonoUNC89

Suppose there is an economic collapse in the United States. And let's say most people lose their jobs and inflation sky rockets.

What would happen to all us folks with mortgages? How would that play out? Would the banks/government allow us to remain in our homes? Or would they repossess the property and force us out?

Some people claim there might be a government conspiracy to tank the economy, force people out of their mortgaged homes and into government housing (e.g. - we'd become full dependents of the state).

Any thoughts?

Look into the 2001 argentina economic collapse. I think we will have our own flavor of a collapse but it will be close to what they seen.

yes they will kick you out of your home, just look at places like los vegas and their ghost town neighborhoods.

Its not a gov. conspiracy its an world elite corporate banking cartel conspiracy, which own/control our gov.

Best thing you can do is get out of debt the best you can, dont keep money in the bank,stock up on at least 6 months worth of supplies. If your going to save any money instead of keeping it in the bank buy gold and silver bullion, but I would keep a few grand in cash as an emergence fund so you can make a quick run to the store to get last min supplies to top off your stockpile when you see the SHTF

[zatoichi]

Originally Posted by maat

If you remember, Reagan lowered taxes substantially and cut deductions. In the Depression, Hoover and FDR raised taxes. So, how much faith should we have considering Obama is following Hoover and FDR?

You better get a stronger grasp of the time line.

Reagan lowed the taxes in 1981 and nothing substantial came in until early 1984. Three years is a long time for something like a tax break to affect a loss of demand.

From 1981 to 1985, states were much more willing to maintain public worker levels. They raised taxes (it did not matter if Democrats or Republicans were running the states) and did not cut personnel. So Reagan started with a stronger base than did Obama. If there were no substantial loss of state and municipal employees, we would have a point lower unemployment rates.

FDR did raise taxes during the Depression. But we were getting out of the Depression until they tried to balance the budget in 1937. The top marginal rates kept going up and the country got out of the Depression. We were almost out of the woods by the end of 1941.

As for Hoover raising taxes, that might be true. But what made it bad was that we entered into a global trade war.

[Roadagent1]

Originally Posted by aponymous

No one is right every time.
America seems way more polarized now than it was in the 80's and income inequality is much more drastic. America has lost standing as a global super power. Things are very different today than they were in the 80's.
Some feel we've hit peak oil, some don't. Either way, I don't think one can doubt that if we have not hit peak oil, we are certainly closer to it now than we were in the 80's.

Correct on statements- in the 80's we still had a number of "pockets" of prosperity (like what we see in Western ND now) Also, if retired with money in the bank, you could buy CD's that paid up 21%

[BareBones]

Originally Posted by desertmarine

This is the EXACT reason why I maintain a International BOL i.e. excessive taxation from the U.S. Government. Even though ALL of the lands that I own are paid for free and clear I still have to worry about taxation, EXCEPT on my International BOL. There is not a single copper penny of taxes to be paid. The weather is wonderful ALL year long and I am away from city life and people. I am here now and will be adding a new flock of sheep to the homestead real soon. My West Texas homestead is similar to where I am now, but I have to tell you let me miss several tax payments and you know what happens...Foreclosure.

OK, I'll bite. In what country does your BOL reside? Where is this secret base located?

[Despierto]

Originally Posted by Grotius

So you'll be able to pay off your mortgage with a few of the $100,000 bills that Bernanke will start printing.

What happens when inflation sets off? Rates go up to compensate for loss of purchasing power.

Heads, the bank wins. Tails, you lose.

[carl.net]

I know you asked about economic collapse but I think I will talk about economic downturn like we are in now. Due to QE3 and the actions before it we are significantly devaluing our money. We have not yet felt the result of that devaluation because most other countries are doing the same so that they can stay competitive globally. But at some point this charade stops and the dollar goes down and everyone else's currency stays up. At that point if you maintain a job, and get cost of living increases, your overall salary will go up at a sufficiently fast rate to allow you to pay off your mortgage much faster. AKA you are being paid more to make up for the dollar being worth less but the bank cannot increase your loan principal. Of course if you do not maintain your job then as everyone else posted you get the boot.

The fly in this ointment is that you may not (probably will not) get a pay increase to cover the devaluation of our currency and in that case everything else will cost more and you will have less cash overall.

My personal advice (it is worth exactly what you paid for it) is to pay off any debt you have as quickly as you can. At least then if you lost your job you have the basics covered and can get a minimum job to pay for taxes and food.