I am guessing that such a scenario has happened in the past, namely, that banks that lent mortgage money went bankrupt, and in some cases, went out of business.

If the bank went into a chapter 7 process, I am guessing that claimants against the bank is assets might make a claim against uncollected mortgage pincipals - I am not sure.

Furthermore, if the bank went bankrupt and went out of business, if there were no claimants against the bank is ''promissory'' assets, then I'd guess that one is outstanding mortgage principal would disappear.

Does anyone have definitive , please.

Thanks in advance.
It was not my bubble, but a friend is who thought about her promissary note.

A smug answer needs a response, so l think that there may not ALWAYS be enough unsatisfied claimants against a bankrupt bank?

The SEC does not have liens on the assets of a bank.
Reena, good answer, thank you.
Good , thanks.

No it does not
The bank is a repository for liens, and there will always be a claimant.

If the bank becomes insolvent there will always be a trustee to liquidate all claims.
FDIC SEC will always have claims against any bank.

Sorry to burst your housing bubble ;-)

Unfortunately it does not work like this when it is a Bank.

No 1. The FDIC takes over a failing bank to insure that business can go on as usual & that bank account holders r able to access their accounts, etc.

Then the FDIC spends a couple of days taking stock in the bank holdings & outstanding loans due.

Then these portfolios r sold off to the highest bidder or turned over to the bank that acquires the assets of the failing bank.

In other words u still owe the money on ur mortgage but u might find that one day u get a letter telling u that ur mortgage has been bought by a new company & that u r to make ur payments to them from now on.

Sorry. but thanks to outstanding bookkeeping requirements ur loan does not just disappear because ur bank went under.

Maybe in Shangre La but not in the free world.

When any person or corporation goes bankrupt, a trustee or administrator is put in charge. One of their duties is to collect all monies owing.

If you miss a payment, you will find that they are as good at collecting as any bank.