What happens to a mortgage if the bank goes down?

Norbert666

Norbert666

Norbert666

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There's lots of talk that HBOS might be next for collapse.

What happens to mortgages if it's with the bank that goes down, or one of it's subsiduaries? (Halifax for example)

Thanks
 
Norbert666 said:
What happens to mortgages if it's with the bank that goes down, or one of it's subsiduaries? (Halifax for example)
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Halifax aren't a subsidary of the HALIFAX BANK OF SCOTLAND group ;)

BM (Birmingham Midshire) Solutions on the other hand are.

No idea what exactly happens to the debtors of accounts that are held within the group though. I would assume that A N Other bank (or the government) buys the debt, and the account holder continues to pay off what is owed.

EDIT: Also, I'd like some source for whatever sparked this thread please, as I was only aware of a drop in share prices, rather than speculation of a collapse.

HBOS was not as heavily invested in the sub-prime market as Lehman's, and as such, I doubt they have much to worry about. There are more lenders out there that have more sub-prime history than HBOS, considerably more.
 
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It's by no means certain, but the current thinking on both sides of the Atlantic seems to be: Institutions that have direct contact with taxpayers (through accounts or mortgages) are getting bailed out by the Government, whereas investment banks are going to be left to fend for themselves.

I imagine that the Goverment would step in to take on any mortages through a firm like HBOS, should they collapse.
 
I haven't actually looked into this but if it follows the same principles as an ordinary business becoming insolvent (and the government doesn't bail them out) then whoever takes over administration of the debts will try to achieve the best results for the creditors - whether this be through calling in the assets and selling them off, accepting offers to unattach the debt (e.g. for full market value or at a percentage) or in certain cases simply ignoring the debt as it would be uneconomical to chase.

It will vary according to the individual circumstances of the financial institution in question and I doubt that the government will allow it to happen as a worst case scenario but it certainly is less than ideal whatever happens.
 
I would have thought your mortgage would be sold to another broker by the liquidators/administrators.

Look at the largest mortgage holders in the US, they were taken on my the government. A bit like being in Soviet Russia - the government effectivley owns more of your hose than you - bummer.

Your savings/pension would most probably vannish, or you would get x% as you are technically a creditor.

It is not the UK commercial banks that have had such a high exposure to the junk bonds that the US investment houses have taken on. Investment Banker is slang for a well used word - there is a valid reason for this.

Too many bet wrong and now they are crying that they have lost it all. Don't forget that they made tonnes of money when it was good. There was one CEO who was largely responsible for investing in the sub primes, he left in 07 with $161,000.000 and then the company went pop/was sold.

This is a huge adjustment verging on a global scale. House prices will revert back to a reasonable price and those that can't afford a house will have to rent. No more silly lending.
 
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Norbert666 said:
There's lots of talk that HBOS might be next for collapse.

What happens to mortgages if it's with the bank that goes down, or one of it's subsiduaries? (Halifax for example)

Thanks
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I've been looking at that today... Doesn't look good.. They are only 1/4 of the value they where last year..

Until we know what exposures bank have with Lehmans etc, there could be a lot more. Including the bank I work for..

bye bye

ps fox is right on this one:
 
What has caused all this? All theses massive banks collapsing with billions sorry for being a bit thick but wth is going on? :D
 
Red and White said:
not according to what ive just read.
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Depends who your savings are with, most financial groups are guaranteed up to £35,000 although some like NS&I or Northern Rock are guaranteed by the Government. Some however do not subscribe to this 'insurance' system so you may get a percentage or you may get nothing theoretically.

Fothsn said:
What has caused all this? All theses massive banks collapsing with billions sorry for being a bit thick but wth is going on? :D
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Have a quick search for sub-prime and America, basically over-extension on high risk mortgages would be the very simple explanation.
 
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