Used so often in old melodramas, it’s become as big a cliche’ as the damsel in distress being tied to the railroad tracks:
The good-hearted widow gets an unwelcome visitor: the the sneering banker who holds the mortgage to her home/ farm/ business. Twirling his black waxed mustache and going “mu-ha-hah!”, he announces that her mortgage is being called in: if she can’t pay off the debt by the end of the month, her property will be forfeited.
I thought the whole point of a mortgage was that you were guaranteed a fixed amount of time to pay off the debt. A bank can’t just announce that they want the full remaining balance NOW- can they?
Or am I confused, and in these melodramas it’s a case of not being able to meet the current installment due?
As I understand it, Depression-era mortgages were generally short-term balloon-style mortgages, which meant that you could be liable for the whole amount at a really inconvenient time.
Foreclosure would typically take place after three to six months of nonpayment, if the obligor has made no alternate arrangement with the mortgage holder. The holder of the note doesn’t walk in and announce the action, to the surprise of the homeowner. If you haven’t paid for a space of time, there is no surprise when your butt is introduced to the street.
er, ya, it happens. It happened to my parents in the early 80s. I’m not sure of the details as I was an early teen at the time, but I do know that it was somehow linked to my Dad’s business going bankrupt. He owned a construction business. At the time, there was a BIG downturn in new construction, and the business suffered badly. As the sole owner, there was some link between business finance and our personal finance. In my Dad’s words (which are, of course, fairly bitter) the bank forced him to declare bankrupcy. As part of the bankruptcy, they took our house. We didn’t see it coming at all - it was up for sale, but at the time, real estate wasn’t selling at all in our town. My parents figured they could weather the bad times, things would pick up, and they’d buy the house back.
Nope, didn’t happen. The city manager of the town bought our house. We found out through the mail - they sent us a letter saying “you have 30 days to get out.”
Did I mention this was more or less my parent’s dream house? The one they built from the ground up to be perfect? And it all happened not a year after my older sister AND my uncle were killed in (separate) car wrecks?
The early 80s were not a good time for the Athena clan.
I believe that the melodrama cliché dates back at least to the middle of the 19th century. So learning about the standard mortgage terms of the 1850s would be interesting here.
Technically speaking, every mortgage I know of gives the holder the right to foreclose even if only one payment has been missed.
Foreclosures on farms has been a major political and social issue throughout American history, simply because it takes money to start a farm and a single bad season can destroy a family’s entire income. Many of the agrarian movements in U.S. history - from the Grange to the Populists - were sparked because economic panics on top of bad weather had leveled farms across the country.
The depression had all of this - the Dust Bowl notoriously - along with those idiotic balloon payments. And banks have no intention of failing if they can call in every overdue mortgage and sell off the properties for whatever they could. Many of the New Deal’s reforms sprang out of this problem.
But foreclosures have never gone away. They continue in the tens of thousands. Simply type foreclosures into Google for a world that may surprise you in its breath and depth and implied misery. How many people today have home equity loans, which are in essence second mortgages? How many have lost their jobs in downsizing? Put the two together and you have homes in danger all over the country. And the bloodsuckers are out in full force.
Argh, my mind is going. There is a clause that can be put into a mortage that essentially lets the mortage holder call in the balance of debt at will. It’s a common practice of predatory lenders and is a factor in the flipping problems we have here in Baltimore.