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Firstly the original mortgages were offered to people that couldn’t afford to pay them back, particularly when the so called “fixed” interest rates rose after an initial one or two year period.
Much has been written about this (NINJA, Sub Prime etc) Secondly the riskier slices of the mortgages were vastly under priced, and so the interest rate premium didn’t begin to compensate for the very real probability of a high rate of failure to service the loans. It turns out that because of the mortgages being sold and sliced and sold, the ownership of the original mortgage is often in doubt.
Not knowing whom to call is another effect of securitization.
Several factors, including the laws of your state, determine the final outcome of your bankruptcy petition.
Chapter 7 bankruptcy provides a means for debtors who have limited assets and income to make a fresh financial start by eliminating most, if not all, of their debts.
By this rule will not apply to transfers to a revocable living trust, or most types of transfers of a trust, in the case of some common estate planning techniques – like gifting an annuity to an Intentionally Defective Grantor Trust (IDGT) – the situation remains unclear, and clients and their advisors must be cautious not to accidentally create an unfavorable taxable event!
because they’re tax-deferred, but because they date of annuitization is deferred to the future; i.e., they have not yet been “annuitized”).