[smiley]

I have my mortgage with Fortis.

They were among the only ones who sold a thirty year fixed rate saving mortgage. Back then it seemed like a wise decision because it would mean that whatever happened to the interest rates the monthly fees would not rise. I did do a background check but until recently (until they embarked on a couple of mad mergers) they were solid firm with a prudent and risk averting strategy.

And now they are in trouble as am I.

The past week I have been discussing all the possible implications of a failure with my financial advisor. Turns out that there is a catch. While the mortgage is secure and there is no way that they for instance could raise my payments or foreclose my house, there is this nasty loophole that they could reclaim my downpayments as they are not directly deducted from the primary sum. And I already have made substantial downpayments so for me it would be a huge financial loss (luckely I did not put all my money in the mortgage, about half of it is spread out over different savings accounts at various other banks).

This is not fast money, product of a ponzi sceme. If it were I would consider it a risk that comes with the trade. I stepped out the markets years ago. Instead it is the product of years of working and living below my means.

Anyway. From a personal (selfish) viewpoint I am grateful that the government intervened and secured (hopefully) my deposits. In a way I am glad that they were among the first to get into trouble, because I doubt that as this drags on, other banks will get the same generous treatment.

Like a lot of people on this site I had huge doubts about using taxpayer money to help these banks. In a way it is like a reward for their irresponsible behavior. But I now see what the implications can be for the average person like me. And for me it is only part of my saving which is on the line. Bad but only half as bad as for others.

It is a little late to make this statement and perhaps I am not the right person to say it because of my peronal position, but I think we should all chip in to try to get the financial system working again, because we simply cannot do without.

That said I think we should also go after those madmen that have engineered this crisis. While the money gained would not be that much it would give me a lot of satisfaction to let people like Greenspan and those bankmanagers feel what it is to be foreclosed.

[scienceteacher]

" . . . they could reclaim my downpayments as they are not directly deducted from the primary sum"

What down payments are you talking about?

Do you mean the initial down payment on your house? Additional payments you made over and above usual mortgage payments to speed up the clearing of your mortgage?

Please clarify.

[DarkDawg]

I think we should all chip in to try to get the financial system working again

Uh, who's "we?"

Why should American taxpayers cover losses of individuals or institutions based in Europe??



...or anywhere for that matter

[frankthetank]

I don't understand what you are saying... Why would your bank failure mean you losing your house/downpayment/whatever you are talking about?

[smiley]

Do you mean the initial down payment on your house? Additional payments you made over and above usual mortgage payments to speed up the clearing of your mortgage

?


I don't know if you have the same construction in the US..

The mortgage consists of two separate parts. One is the loan itself, with a fixed interest rate. The other is a savings account with a fixed interest rate. When you make a downpayment the money is put on the savings account, so it does not actually reduce your loan.

At the end of the lifetime the savings and loan cancel each other out. Because of the interest rate this is interesting if you bring your own money when you buy a house.

The problem is that the savings account at Fortis is separated from the loan. Normally at a bankruptcy they deduct the savings from the loan (what you owe against what you own). But what I discovered this week is that they handle the loan and the savings account as seperate entities. Since they are not tied together, in case of a bancruptcy you will loose all the money in the savings account.

In this case it means initial downpayments as well as the sum of my monthly downpayments.

Uh, who's "we?"

Why should American taxpayers cover losses of individuals or institutions based in Europe??

Don't forget the European central banks also sunk a 100 billion dollar in the markets.

I don't think that Americans alone caused this, nor that they could solve this alone.

Perhaps it surfaced in the US first because of their overall credit situation, but I think this is a global crisis, caused by the irresponsibility of financial institutions and their regulators worldwide. So we're all in the same ship.

[emeraldg40]

Do you mean the initial down payment on your house? Additional payments you made over and above usual mortgage payments to speed up the clearing of your mortgage

?


I don't know if you have the same construction in the US..

The mortgage consists of two separate parts. One is the loan itself, with a fixed interest rate. The other is a savings account with a fixed interest rate. When you make a downpayment the money is put on the savings account, so it does not actually reduce your loan.

At the end of the lifetime the savings and loan cancel each other out. Because of the interest rate this is interesting if you bring your own money when you buy a house.

The problem is that the savings account at Fortis is separated from the loan. Normally at a bankruptcy they deduct the savings from the loan (what you owe against what you own). But what I discovered this week is that they handle the loan and the savings account as seperate entities. Since they are not tied together, in case of a bancruptcy you will loose all the money in the savings account.

In this case it means initial downpayments as well as the sum of my monthly downpayments.

Uh, who's "we?"

Why should American taxpayers cover losses of individuals or institutions based in Europe??

Don't forget the European central banks also sunk a 100 billion dollar in the markets.

I don't think that Americans alone caused this, nor that they could solve this alone.

Perhaps it surfaced in the US first because of their overall credit situation, but I think this is a global crisis, caused by the irresponsibility of financial institutions and their regulators worldwide. So we're all in the same ship.

So this sounds like a first and second mortgage then? If you default on either one here in America its bad news. And I dont think England would give a rat shi* either. ????? Sell it if ya cant pay for it

[jbrovont]

I think what he's saying is, that he's been paying over and above the monthly minimum payment. The bank, instead of taking it away from the principle, puts the extra in a savings account, and this gets reflected against his "principle," unless of course fortis goes nuclear and loses his "savings" at which time they say "oops, sorry" and he owes the whole loan amount without the "savings" they set aside. This is criminal in two ways imo - first, they're keeping it out so they can calculate interest on more each month (check it, but I'm sure they're doing it). Secondly, it's misleading on the bank's balance sheets, as it shows more "cash deposits" than there really are, and now they're taking that and blowing it on liabilities and shoving you down river.

Is that about right?