subject: What Happens When The Fed Forecloses On Your Bank? [print this page] What Happens When The Fed Forecloses On Your Bank?
What Happens When The Fed Forecloses Your Bank?
If your real estate mortgage is in foreclosure, is it bad luck when the government closes the bank on Friday, the 13th? On November 13, 2009, the Federal Deposit Insurance Corporation (F.D.I.C.) announced that the Office of Thrift Supervision had closed some banks, including a couple in Florida. This was not exactly a surprise - so far this year the government has closed 116 banks. The Florida banks that closed were Century Bank in Sarasota and Orion Bank in Naples. They weren't very big banks, but when it's your mortgage, it's a very big deal. All the deposit accounts of both banks, such as personal and business checking accounts, CD's and Social Security direct deposits, have been transferred to IBERIABANK of Lafayette, Louisiana. Branch offices have reopened with the IBERIABANK name. So, if IBERIABANK got the deposits and the buildings, it must have the mortgages too, right? No, that's not what happens. The F.D.I.C is appointed to be the receiver for the banks that close. Think of a receiver as something like a trustee or a manager. The F.D.I.C. is the federal agency that insures savings deposits in banks and savings associations all over the country. If you have ben working on getting a modification or waiting for approval of a short sale or a deed in lieu of foreclosure, a bank failure can undo all the negotiations. A deal that was almost closed is probably out the window. Instead of dealing with a small loss-mitigation department at the bank, you will be negotiating with a huge federal agency. If you were hoping for a speedy resolution, this is bad luck. Maybe more time is just what you need. When the plaintiff in a foreclosure lawsuit goes out of business or merges with another bank, the case can't proceed to judgment until the new owner of the mortgage enters the case. It can take quite a while for that to happen. If you have some equity and are applying for a reverse mortgage, for example, or if you're still trying to save enough for first, last, security and moving expenses, getting a few more months can be really good luck. Consult a licensed Florida mortgage foreclosure defense attorney to find out what effect the bank closing will have on your mortgage. When the government closes the bank, your real estate mortgage foreclosure isn't going to go away just because the bank did.
If you would like me to share more information that may help, or possibly explain better what is happening to you in this foreclosure mess, please don't hesitate to come to my site at http://www.palmbeachforeclosurelaw.com
