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Reply #19: Your lender can only demand payment in full... [View All]

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Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010)

Snarkoleptic

(1000+ posts) Send PM | Profile | Ignore

Sun Mar-09-08 02:55 PM
Response to Reply #6

19. Your lender can only demand payment in full...

if your loan has a 'call option'(a rarity) or if you're in default (read your mortgage).
A borrower is considered in default if there is a violation of any of the terms of the mortgage (not just payment default).

A new and disturbing practice is that lenders are shutting down future draw provisions in home equity lines of credit and other 'open ended' loans. This is especially common in declining markets.

You can also expect to see credit card issuers summarily reducing or freezing future charges and advances.
Credit card issuers are also big fans of 'unversal default', which means that if there is any derogatory information (on other accounts) in your credit, they can jack up your rate to their 'default rate' which is often 28% or more. If you carry a balance, you need to watch your statement for any changes in credit line, interest rate, and fee.

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-JPM margin call warning - my favourite financial blog says "The Game is Over". Here's why.	GliderGuider	Mar-09-08 02:02 PM	#0
- Hmmmm? I better plant a bigger garden this year.	Uben	Mar-09-08 02:08 PM	#1
- cash meaning cash in hand?	gristy	Mar-09-08 02:24 PM	#2
- An FDIC insured account does you no good...	Wednesdays	Mar-09-08 02:38 PM	#6
- elsewhere a DUer posted that there is often language in mortgage docs	salin	Mar-09-08 02:39 PM	#8
- Even so..	sendero	Mar-09-08 04:53 PM	#59
- My guess is that if the bank were to go into default	salin	Mar-09-08 05:01 PM	#64
- That might be the case.	backscatter712	Mar-09-08 06:56 PM	#88
- What loan?	gristy	Mar-09-08 02:52 PM	#14
- FDIC is there to protect the banks, not the depositors, no matter what they tell you.	GliderGuider	Mar-09-08 03:03 PM	#22
- Why are you assuming all of the banks are going to fail?	high density	Mar-09-08 05:05 PM	#66
- "One guy on one blog"? GMAFB	GliderGuider	Mar-09-08 05:30 PM	#71
- Well show the proof that Bank of America et al are on the brink of failure	high density	Mar-09-08 05:41 PM	#75
- agreed... but	salin	Mar-09-08 05:46 PM	#77
- It doesn't start with the Bank of America.	GliderGuider	Mar-09-08 05:49 PM	#79
- what about pensions like TERS and PERS?	roguevalley	Mar-09-08 10:41 PM	#90
- Your lender can only demand payment in full...	Snarkoleptic	Mar-09-08 02:55 PM	#19
- you may have just answered a question I raised down thread...	salin	Mar-09-08 03:05 PM	#23
- Perhaps, but most loans aren't owned by banks, and in many cases, the ones that ARE...	elehhhhna	Mar-10-08 04:38 PM	#107
- As long as too many banks don't fail	salin	Mar-09-08 02:38 PM	#7
- yes, that is the best place for your money	CountAllVotes	Mar-09-08 03:08 PM	#28
- How bilblical and ironic...	Wednesdays	Mar-09-08 02:30 PM	#3
- That is the best use of a Bible quote in context that I have seen in awhile	Elspeth	Mar-09-08 02:52 PM	#15
- typical term of margin call is 72 hours	DemReadingDU	Mar-09-08 02:35 PM	#4
- IF and When	DemReadingDU	Mar-09-08 02:47 PM	#10
- It reads like there are levels - top bank	salin	Mar-09-08 02:57 PM	#20
- That's how I read it too.	GliderGuider	Mar-09-08 03:06 PM	#24
- So this 'margin calling' process could go on for weeks/months	DemReadingDU	Mar-09-08 03:13 PM	#31
- Yes. Don't expect this to all unwind within the next six months.	GliderGuider	Mar-09-08 03:16 PM	#33
- It reads like.. if a bank can't pay the margin	salin	Mar-09-08 03:26 PM	#38
- Thanks for posting this here	salin	Mar-09-08 02:37 PM	#5
- How can they call in home loans being paid on time?	williesgirl	Mar-09-08 02:41 PM	#9
- If the value of the home has dropped below the balance owed (it's "under water"), or...	GliderGuider	Mar-09-08 02:48 PM	#11
- Thanks - are you then able to make up the diff in the value vs loan?	williesgirl	Mar-09-08 02:51 PM	#13
- I think it would depnd on how desperate the lender is.	GliderGuider	Mar-09-08 02:54 PM	#18
- as I read the article and the original article from Reuters,	salin	Mar-09-08 03:01 PM	#21
- nah	northzax	Mar-09-08 04:47 PM	#58
- I disagree with you that "call" clauses in mortgage loans are common in the U.S.	amandabeech	Mar-09-08 03:58 PM	#47
- How about, "For sufficiently small values of 'common'"?	GliderGuider	Mar-09-08 04:20 PM	#51
- Breach of covenant. That said, no one wants to do that. This line of thought is dumb.	BadgerLaw2010	Mar-09-08 06:06 PM	#82
- I advised someone around here to do just this	CountAllVotes	Mar-09-08 02:49 PM	#12
- I've been toying w/doing this but am scared. Have lost $25K since Oct and wanted to see if it'd	williesgirl	Mar-09-08 02:53 PM	#16
- my relatives I mention are still waiting too ...	CountAllVotes	Mar-09-08 03:12 PM	#30
- Can you risk losing it all? Take what you have left out NOW!	Texas Explorer	Mar-10-08 12:55 PM	#103
- I'm not really in the stock market, have money market fund	DemReadingDU	Mar-09-08 02:54 PM	#17
- Perhaps they're still getting income	Warpy	Mar-09-08 03:08 PM	#27
- if they lost 60% of what they have	CountAllVotes	Mar-09-08 03:15 PM	#32
- "survive on a 90% income cut "	annabanana	Mar-09-08 04:56 PM	#61
- I'll be in a house	Warpy	Mar-09-08 06:59 PM	#89
- Yes but typically...	sendero	Mar-09-08 04:58 PM	#62
- Forget the insurance, it is only as good as the resources it has to cover the losses	greyhound1966	Mar-09-08 03:23 PM	#36
- try a credit union	CountAllVotes	Mar-09-08 03:39 PM	#42
- From what I understand, the credit union I do business with	Wednesdays	Mar-09-08 04:13 PM	#50
- wow that is really scary	CountAllVotes	Mar-09-08 04:32 PM	#55
- then you have an odd credit union	northzax	Mar-09-08 04:55 PM	#60
- FDIC to Add Staff as Bank Failures Loom	DemReadingDU	Mar-09-08 04:00 PM	#48
- So this is why the preparations for martial law	Elspeth	Mar-09-08 03:06 PM	#25
- If martial law is declared, do banks shut down?	williesgirl	Mar-09-08 03:07 PM	#26
- I suspect they've seen this coming for the last couple of years.	GliderGuider	Mar-09-08 03:12 PM	#29
- this is why they have been ramping up the infrastructure of the police state since reagan	datasuspect	Mar-09-08 03:29 PM	#40
- As someone who knows	Delphinus	Mar-09-08 03:17 PM	#34
- I'd pay off debt if it was me	CountAllVotes	Mar-09-08 03:22 PM	#35
- Thanks.	Delphinus	Mar-09-08 03:25 PM	#37
- you are very welcome	CountAllVotes	Mar-09-08 03:28 PM	#39
- Good luck, CAV -	Delphinus	Mar-09-08 04:24 PM	#53
- I was really just saying, "Stay out of the F'ing Stock Market!!!1!11!"	GliderGuider	Mar-09-08 03:32 PM	#41
- Haha!	Delphinus	Mar-09-08 04:23 PM	#52
- I will fight their call in with bullets.	lonestarnot	Mar-09-08 03:45 PM	#43
- How can you fuck up a nation in only 8 years?	Rex	Mar-09-08 03:47 PM	#44
- "We mucopurulent republicon homelanders have our ways. Shock and awe, baby." - Commander AWOL	SpiralHawk	Mar-09-08 04:27 PM	#54
- It dawned on me yesterday what they mean by 'fight them over there	Rex	Mar-09-08 04:33 PM	#56
- The Fed will probably pay it	CGowen	Mar-09-08 03:52 PM	#45
- Saying that banks will call in your mortgage loan is a straight up untruth	EvolveOrConvolve	Mar-09-08 03:56 PM	#46
- We'll see. I'd expect a series of widening ripples as the level of desperation increases.	GliderGuider	Mar-09-08 04:07 PM	#49
- You clearly don't understand what is happening.	sendero	Mar-09-08 05:04 PM	#65
- I agree with you about banks.	GliderGuider	Mar-09-08 05:23 PM	#69
- You do not understand real estate. Real estate is not liquid. There's no "cash" there.	BadgerLaw2010	Mar-09-08 06:11 PM	#83
- Well that's a relief, then. We'll all get to keep our homes.	GliderGuider	Mar-09-08 06:24 PM	#87
- The home mortgages that banks called in during the Great Depression	fasttense	Mar-10-08 09:39 AM	#93
- I'm going to get drunk.	alfredo	Mar-09-08 04:44 PM	#57
- DOOOO OO O oo oo oooo o mmmmmmm!!!1111	jpak	Mar-09-08 04:59 PM	#63
- Cash is NOT king when there is no gold standard...	roamer65	Mar-09-08 05:09 PM	#67
- It sure beats Nortel shares...	GliderGuider	Mar-09-08 05:18 PM	#68
- Yes it does and I am glad to hear you sounding warning bells.	roamer65	Mar-09-08 05:26 PM	#70
- Regarding Zimbabwe	GliderGuider	Mar-09-08 05:40 PM	#74
- Let's see if they get to the level of post-WW1 Germany...	roamer65	Mar-09-08 05:44 PM	#76
- foreclosing on homes	NJCher	Mar-09-08 05:35 PM	#72
- K & R. I feel sick to my stomach.	TheGoldenRule	Mar-09-08 05:37 PM	#73
- Ditto! K&R nt	laylah	Mar-09-08 05:46 PM	#78
- I thought it was illegal to call in a loan like that if the borrower's making his payments on time.	backscatter712	Mar-09-08 06:01 PM	#80
- It depends on the mortgage. There are "demand clauses" in some that could have that result	GliderGuider	Mar-09-08 06:12 PM	#84
- what do they think they'll get from students?	RainDog	Mar-09-08 06:02 PM	#81
- garnish future wages?	salin	Mar-09-08 06:12 PM	#85
- I think we're going to see a huge wave of personal bankruptcies as this juggernaut gets rolling	GliderGuider	Mar-09-08 06:15 PM	#86
- Bankruptcy rate in 2008 is expected to equal the rate during the Republican Great Depression.	fasttense	Mar-10-08 10:02 AM	#94
- Cash is crap right now. Gold is king.	El Pinko	Mar-09-08 11:04 PM	#91
- morning kick	DemReadingDU	Mar-10-08 07:23 AM	#92
- Fuck em	Indenturedebtor	Mar-10-08 10:25 AM	#95
- Life in the mountains is a real struggle. First there are critters you don't have to contend with i...	Mountainman	Mar-10-08 10:52 AM	#99
- And still Dubai builds and builds and builds......	WinkyDink	Mar-10-08 10:30 AM	#96
- that's the problem -- cash is king -- where do you put your cash?	antigop	Mar-10-08 10:45 AM	#97
- WRONG!	masmdu	Mar-10-08 10:51 AM	#98
- Wow, such sage advice	Wednesdays	Mar-10-08 11:22 AM	#100
- Yeah, those stupid hedge funds and the Fed - what do they know about anything?	GliderGuider	Mar-10-08 11:44 AM	#101
- i'm sitting on a stack of cash-is it safer buying a tbill through a brokerage or treasury direct ?	natrat	Mar-10-08 12:39 PM	#102
- they all need the money back	NanBo	Mar-10-08 02:33 PM	#104
- afternoon kick	DemReadingDU	Mar-10-08 02:33 PM	#105
- Breathing a sigh of relief	bain_sidhe	Mar-10-08 04:26 PM	#106
- Sorry I'm too late to recommend. Nice find, GliderGuider!	robertpaulsen	Mar-10-08 05:34 PM	#108

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