Bond question

Discussion in 'After Hours Lounge (Off Topic)' started by James_Kiang, May 5, 2009.

  1. James_Kiang

    James_Kiang Screenwriter

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    A friend of mine at work was going through some of his papers and came across a Single Family Mortgage Bond that his mother and step-father purchased back in the '80s. It was for $5000 at an interest rate of 13.25%. Using a compound interest formula, that would seem to put it at a value of over $200,000.00. Is that right???

    On a separate note, both his mother and step-father are deceased. He has the actual bond - I was just holding it. Does something like this pass on to other family members, or is it now just a plain piece of paper?

    Thanks!

    EDIT: I just realized that the $200k number is for after 30 years, but still, that is only a few years away at this point.
     
  2. Dennis Nicholls

    Dennis Nicholls Lead Actor

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    Oy veh.

    Which died first, the mother or the step-father? Did either die intestate (lawyer talk for without a will)? This is a long and complicated example of a problem in the law of decedent's estates.
     
  3. James_Kiang

    James_Kiang Screenwriter

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    I believe the step-father died first, then the mom. There are of course other siblings, which I assume just makes things that much more complicated [​IMG].
     
  4. CameronJ

    CameronJ Stunt Coordinator

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    So many questions...

    I'll admit I don't know what specifically a Single Family Mortgage Bond is - so please take these questions with a grain of salt.

    To address your main question - assuming the bond has not been redeemed it has value. The question is how much value and to whom does it belong. I'm the last person you want to ask about probate issues - so nothing more from me on that point.

    1. Was $5,000 the face value or the actual purchase price? Are you sure they didn't buy the bond at a discount with the intention of getting $5,000 when the bond matured?
    2. Speaking of maturing - is there a maturity date on the bond?
    3. Is your friend sure the interest was compounding and not being paid periodically to his parents?

    Lastly - the bond should have the name of the issuer and of the Transfer Agent/Bond Paying Agent on it - along with a serial number. Ignoring the probate issues - the first step would be contacting the Agent do determine if the bond has ever been redeemed (probably not given that your friend has the actual certificate) and if not what the status of the bond is.
     
  5. ChristopherG

    ChristopherG Screenwriter

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    This is the best I've got.
     
  6. mcthings

    mcthings Agent

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    You will need to provide us with the face value, purchase price, at maturity date for any analysis [​IMG] Then we can find the present value.
     

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