Do you still have to pay the mortgage

[Mizmoon]

if your house is destroyed along with an entire city?

I guess if you have no insurance you do.

What about your other bills - does your credit just get ruined and that's that?

[Midlodemocrat]

1. You have to specifically have flood insurance for

insurance to pay in a situation like this.

My agent told me once, that if it drips down, they pay, rises up, they don't.


We don't live near a flood plain, but Good Lord those poor people do.

[Cattledog]

2. And soon you

won't be able to declare bankruptcy!

[philosophie_en_rose]

5. coming soon: debtor's prison.

What are people going to do if their house floods and they can't declare bankruptcy? Especially since employers are using credit reports to hire people?

What's next? Some sort of government workhouse, so that the unfortunate can die and relieve the suplus population?

[Bouncy Ball]

16. What's next?

Why poorhouses and orphanages filled with kids whose parents are alive, but in debtor's prisons and poorhouses!

Come on, get with the picture here!

Just think Dickensenian. Only worse.

[Horse with no Name]

3. I don't think flood or hurricane insurance is available in N.O.

I may be wrong though. These people will just lose everything.

[MildyRules]

8. You are

My family had both.

[elehhhhna]

4. Yes you're supposed to pay. Bankruptcy wil be hard to grant

as under the new (Oct.) law, earnings available for repayment of debt are calculated based on monthly average income. This means if you're suddenly not working & have no income the court will look at your past average and base your payment plan on THAT. Very stupid.

[Jacobin]

6. If you don't have insurance you don't have a mortgage

Lenders won't lend without insurance on real property.

[philosophie_en_rose]

7. But there are specific types of insurance.

Standard insurance policies don't apply to floods. At least in my experience.

[MildyRules]

9. You are correct

You need flood insurance separately.

[Cleita]

10. I have heard of people just abandoning the property

when destroyed in a disaster and there was no insurance to rebuild. I believe they don't really go after you for not paying the mortgage. The Bank or whoever holds the mortgage, takes possession of the property and sells it for whatever they can get to recoup their losses. Of course this leaves the former property owner homeless.

[Divernan]

12. With the new bankruptcy law, banks can get lifetime judgements

on whatever you owe them. So you had a 1/2 mil McMansion which was totally destroyed and a standard homeowners' policy but no flood insurance? Your contents would be covered, but not the building. So the bank takes title, sells the land for a pittance, and gets a judgement against the homeowner for the balance.
The only reason the banks might have written off the loss before was that the owner COULD declare bankruptcy.

A lot of "right-thinking" Republicans, just like the rest of us, are just one disaster or one paycheck away from financial ruin.

Given the prediction of more frequent and more severe hurricanes, I really question who will rebuild below sea level.

[1932]

15. I could be wrong, but I think there are only a few states that don't

allow lenders to go after borrowers for the part of the balance that isn't recouped from the bankruptcy sale.

So, obviously, a lot of these houses aren't going to sell for as much as is owed on them. Unless LA protects borrowers from having to pay the balance, homeowners will owe the banks the difference.

[zbdent]

11. Good point - does the PMI cover this?

when you don't have the minimum, the banks force you to take the PMI - mortgage insurance, forget the actual term.

So, if your home gets totalled, what happens then?

[Mizmoon]

14. PMI insures that bank, not the homeowner

so when you default they collect the money they loaned you from PMI, but they can still go after you for the money you owe them.

[China_cat]

13. When Hugo hit and the banks were out

for 3 weeks, the company carrying our mortgage (First Union Bank) put a full page ad in the newspaper saying that loans with them could be deferred up to 90 days without penalty or interest.

When we called them about the mortgage, though, we were told that those payments had to be made in full on time or they'd foreclose. Didn't matter what the condition, either.

Not every company did this and First Union has now been bought by Wachovia so I hope things are a bit different.

Check your mortgage insurance though if you allowed your lender to provide it. Quite a few people here with First Union mortgages who allowed them to provided insurance only found out AFTER Hugo hit that, even though they had been paying for comprehensive homeowner's coverage, what had been written for them by the bank was RENTER's insurance.

[likesmountains 52]

17. My son's car is parked in NO and I just got the insurance bill. For

his car insurance (liability only) they told me that if and when he finds the car and it's ruined they will refund my from the date of Katrina...