Stop Paying Mortgage Payments?
Stefan Karlsson, an economist in Sweden, has a blog focused on hard-hitting economics commentary. In a recent post, he opined as to whether or not the current government bailout will cause people to stop paying their mortgages. The bailout provides incentives for the government to do everything in their power to ensure people do not lose their homes to foreclosure, including offering better terms and payment options.
His thoughts were in reference to a recent interview with Peter Schiff, author of "Crash Proof" and CEO of Euro Pacific Capital (emphasis my own):
"If you haven't already listened to it, do listen to the LRC podcast where Lew Rockwell interviews Peter Schiff. As usual with Peter Schiff, he provides a lot of valuable insight, but what I actually found most interesting is how he reveals that with the bailout package, it is economically rational to stop paying off your mortgage. Because if you do, your lender will sell the mortgage to the government who under the package must do everything they can to prevent foreclosure, which will mean that they will have to offer you a sweeter deal. So when Rockwell asked Schiff what an ordinary person can do to save themselves in the ongoing economic meltdown Schiff replied that the most obvious and best thing to do is stop paying your mortgage. I spontaneously laughed when I heard that as I figured he was only ridiculing the irrationality of the bailout plan. But maybe Schiff is right, maybe it would be rational (at least for some people) to stop paying your mortgage with this bailout plan. Can anyone find any reason why Schiff is wrong on that?"
What do people think of this rationale? I find it crazy that the government has put themselves in a position where it could even be remotely possible for people to take advantage of such a situation.
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Comments
Lets play this out a little. We all stop paying. What do you figure? 15 days, 20 tops, all the banks fold. Keep enough in the account to cover any outstanding checks. Make sure you have your cash in your pocket/bed/safe at home. This could get messy.
Really want to stick a fork in them, stop payment on auto loans too. Take it all the way. CC, Sig Loans, any debt you may have right now.
Convert all your Fiat Reserve Currency into canned goods, silver, storable goods.
30 days tops, we have the Fiat Reserve on the ropes.
We may as well take out the IRS this way too. Everyone Change the W4 form to indicate 5 dependents, then takes a 1 or 2 week vacation at home, all at the same time. Play card games, board games, in the yard, at the park, with the kids. Keep the kids out of school too. They are paid per student for each day they are in class for the day. This helps the teachers as well, no students, no need to show for work. Sitters aren't needed, you are at home with them.
Buy what you need for the two weeks well in advance. Now That's a Protest!!!! No blood.
What do you say? The week of and after Thanksgiving? Too Soon, then maybe Christmas, 18th through the end of the year?
Texas Hold'em style, I'm all in.
lol, I wonder?
Hi,
Good post....I need one information , What happens to a real mortgage when a debtor files for bankruptcy?
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Mortgage has become the major problem where people see the shortest way to earn money.This has become the scandle.
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mortgage has become the major scandle this has become the easyst way to earn money.
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The mortgage has become the major problem it has many things that cause .n intentional effort to deceive is unclear, but a number of recent news reports have blamed the current financial crisis on the Community Reinvestment Act
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A mortgage is the transfer of an interest in property (or the equivalent in law - a charge) to a lender as a security for a debt - usually a loan of money.
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While a mortgage in itself is not a debt, it is the lender's security for a debt. It is a transfer of an interest in land (or the equivalent) from the owner to the mortgage lender, on the condition that this interest will be returned to the owner when the terms of the mortgage have been satisfied or performed.
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In most jurisdictions mortgages are strongly associated with loans secured on real estate rather than on other property (such as ships) and in some jurisdictions only land may be mortgaged.
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the mortgage lender, on the condition that this interest will be
returned to the owner when the terms of the mortgage have been
satisfied or performed. In other words, the mortgage is a security for the loan that the lender makes to the borrower.
The goverment decision to lower the interest rates is to ensure the stability of real estate sector. So one cannot expect the further down in prices slowly it will pickup.
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It was written just before the economical crisis started so I think this guy has said some crucial points. About a year ago people weren't able to pay for their mortgages, they were losing their jobs and etc. Not paying a mortgage maybe is a good decision but you can't do it always. It can have very bad consequences in the future. However thanks for the nice article and I will be waiting for more nice ones from you in the nearest future.
Sincerely,
Tim Nollton from instant payday loans
What is the major problem we are facing if we Pay the mortgage payments?
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Hi,
Can anyone tell accurate formula for calculating reverse mortgage?
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Nearly everyone overpays when taking out a mortgage loan. Unless you can recognize how retail mortgage brokers mark up your interest rate for a profit, you will overpay and probably never even know it. Here are several advanced strategies for recognizing retail mortgage broker markup and how to avoid paying it with your new mortgage loan.
John,
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I can minor your mortgage costs not including having to refinance your loan. We can stop the foreclosure method with the many associations we have at banks.
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The new property owner would have right to sell the house if he decides, which would again put the renter in a bad place of needing to shift with small notice. If the sale of the possessions were covered in the sell and rent back contract, then positive limits need to be outlined. This way, the purchaser would not be permitted to sell the home unless the occupant provided written authorization.
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The activity in the states continues to rise. Numerous states are considering legislation to curb the foreclosure crisis. Nothing of course can stop it at this point, but the states seem to feel that increased regulation of mortgage companies will at least help the situation. Mortgage Licensing is one of the hotly debated topics in the states. Let's take a look at the recent regulatory activity as it relates to mortgage licensing.
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The real estate business in Mexico and Central America is different from the way that it is conducted in the United States.Prices are often much cheaper than most areas of the U.S., but in many locations, prices of houses and lots are as expensive as the U.S., one example being Mexico City. U.S. banks have begun to give home loans for properties in Mexico, but, so far, not for other Latin American countries.
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Mortgages have been open to people and are a very straightforward way of fulfilling financial loopholes.
Peter,
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Jennifer
Tremendous post and will look forward to your future update.
i sincerely hope that we come out of this economic downturn
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Great post, I look forward to reading more.
Jerom,
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It is always interesting to read some articles written in the beginning of world wide crisis. People were in panic and they didn't know what to do if they were even thinking about not paying mortgage payments... The thing is that both people and government are guilty in such a situation now. People - because they were taking huge loans that they sometimes couldn't really afford at all. Government - because they were easing loan rules even when the crisis was here. Let's just hope that everything will be all right now and the crisis will be finished soon. Thanks for the nice article one more time and keep writing such nice ones in the future too.
Sincerely, Tim Nollton from no credit check payday loans website