NO MORE MORTGAGE PAYMENTS?
From the Open Forum - Hat tip Raul
Feds May Be Considering Subsidy on Troubled Mortgages
By: PAUL JACKSON
November 4, 2008
Feds considering subsidy on troubled mortgages - housing wire
One plan that may be garnering some consideration is the idea of a federal subsidy for troubled borrowers, perhaps tied to an effort to modify loans. The memo outlines a proposed bailout that would use three-year subsidies for some troubled borrowers.
The proposal outlines the mechanics of a mortgage bailout that would cost as much as $441 billion, relying primarily on a three-year borrower subsidy that would be repaid in five years, with interest. “Upon receipt of a notice of default on an owner-occupied primary residence, a homeowner could apply to participate in a program under which the government would fully subsidize three years’ mortgage payments in exchange for a note, to be paid in a lump sum five years from receipt of the first payment subsidy, equal to the payment subsidies plus interest accrued at the federal funds rate,” reads the proposal, in part.
No More Mortgage Payments Soon - Get ready to Default! - Mr Mortgage
Oh my. Friends, get ready to default on your mortgage…on purpose. The first chatter about the government sponsored loan modification initiative has surfaced from Paul Jackson at Housing Wire and what a disaster it is.
I have been telling you guys for months that a homeowner bailout is coming. But this is unlike anything I expected - it actually encourages mortgage holders of all paper grades to default. This is better than a Pay Option ARM because the monthly payments are zero! Why not default when you get to skip three years of mortgage payments and pay the government back five years from now at FED FUNDS RATE!
Stop Paying Your Mortgage Today - Market Ticker
Assuming your home is worth equal or less on the market today than your outstanding mortgage balance, of course.
You deserve to live free for a year, and you deserve to have your home price come way down so you can buy it back in a few years for much less.
You've already been taxed to the tune of $700 billion for a bailout for the bankers, even though you told Congress "no".
Now the FDIC and Treasury are "working on a plan to curb foreclosures."
In return I recommend that every American with a mortgage immediately stop paying.
Whether you can afford it or not.
Consult with an attorney and CPA, in the same room before you act to make sure your specific mortgage (and the state in which you live) is a "non-recourse" loan and to understand exactly what impact this will have on you (it will come with a significant impact, most specifically to your credit rating! Hear me out - you may find that this course of action makes perfectly good sense.)
See, in many states purchase-money first mortgages are "non-recourse", meaning that all they can do is ruin your credit and foreclose on your house.
They cannot force you into bankruptcy, they cannot garnish your wages.
And from the time you stop paying until the time you get evicted, you get to live there for free.
Finally, after you have been foreclosed upon, your house (and lots like it if your friends and neighbors do likewise) will drop dramatically in price. Presto! In a year or two you will be able to buy it back at half what you paid for it in 2004 or 2005. Now that's a bargain.