When Gary North was on Art Bell, he mentioned the possibility that the time may come when there would be such widespread bankruptcy and unemployment that banks would simply allow people to keep the houses they were in at the time, thereby averting widespread homelessness. What is the realistic potential of that scenario? I am considering buying a new home now to take advantage of the current rates. The other option is to stay where I am and keep all debt to a minimum to survive the possible loss of income. (Of course I would stock up on supplies.)

But if we get to keep the house we are living in at the time, I don't want to be stuck with this townhouse.

This scenario assumes that civilization has not collapsed completely. Does anyone have any insight into this financial dilemma? Rates may never be this good again, as we are all well aware.

Another question which is related: credit card debt. Should I run it up on survival supplies? If we become unemployed during the ensuing depression I'll be in deep doo doo.

p.s. I know you will call me a DGI. But this is a hypothetical which seems to be compatible with Yourdon's current prognostication.

-- Spoticat (incognito@y2k.com), February 12, 1999

Answers

During the 30s there was a moritorium on foreclosures but this occurred after some 6500 banks had closed. Trouble was..there never was a hold on the government selling your property for taxes. That's how most of the farms and homesteads changed hands. I don't believe I would run up m credit cards. What if only minimal disruption occurs but it's enough for you to lose your job. Creditors CAN force bankruptcy--the question is who is buying? Remember, bankruptcy is actually an action in Federal Court in about 50% of the states. My suggestion would be to sell your townhouse--hard to lay in wood, don't ya know--and move to the urbs. If for no other reason than it's a better place to live. Don't sell the TH to escape. Probably should have done that last year. Check with friends and family and see if somebody has room if you bring supplies. Good friends are worth more than gold.

Check six. Lobo

-- Lobo (hiding@woods.com), February 12, 1999.

Moratorium is temporary, not a permanent debt "forgiveness." Powers that be will determine if a moratorium, and if so, how long it will last. After moratorium is over, can you the "owner" (Hah!) just continue with payments, or will payments from during that period also be due? Again, the powers that be will determine that.

Remember, though, even if you have "paid off" your dwelling/land, the government still owns it. (Try not paying property taxes and you will find out real quick who the real owner is.) Unless you have "alloidal title" or a "land patent".

Other threads here, as I repeat over and over, have likely covered most "new questions". I know this one has been covered many times, as I and others have contributed at length.

-- A (A@AisA.com), February 13, 1999.

Forgive me if I asked this before but I don't recall seeing an answer. I read that during the thirties there were people who made their payments on their mortgages but still lost their house. When the small bank that made the home loan would go bankrupt it would be taken over by a larger city bank. The people then lost their home. Is this true?

-- Joe O (ozarkjoe@yahoo.com), February 13, 1999.

There were many foreclosures in the thirties, despite most banks being closed to withdrawals for nine years. Thousands of homeless families lined the roads, heading west in search of field-hand jobs. Read 'Grapes of Wrath,' meet Tom Joad.

-- Spidey (in@jam.com), February 13, 1999.

Colorado has introduced a bill to protect properties from forclosure due to y2k skrew ups. Not quite what you are asking for, but it is a start. I agree you never really own anything in this country, we all just rent from uncle sam. Even our freedom to make a living can be taken away if we don't pay the income and SS tax. Serfing through life.

-- Bill (y2khippo@yahoo.com), February 13, 1999.

Bill,

Your supposed to think you're free!

-- Freeman (freeman@cali.com), February 13, 1999.

I've requested legistlation at both fed and state level to declare a four month "moratorium" on foreclosure - to be extended if needed by circumstances. Fed taxes are included - if good faith effort made to pay.

Reason for four month? I figured that this would cross the first quarter point of 2000, and would cross the April 15 point too. If longer, many businesses would lobby against the bill to prevent freeloaders from cheating.

To get it passed, you are going to have to contact your senator or house rep to get it moving. If you don't promote it, - yes, you too could lose your house (or get evicted) if ANY single bank or tax office screws up your mortgage payment or escrow account transfer.

-- Robert A. Cook, P.E. (Kennesaw, GA) (cook.r@csaatl.com), February 14, 1999.