Have you been paying your mortgage? Then it sucks to be you

Do you have a mortgage you pay every month? Or were you saving up to make a big down payment.

Then you made the wrong decision.

Smart borrowers have simply stopped paying the mortgages, letting them (unlike you) qualify for bailouts from the federal government:

Calculated Risk: FHFA Modification Program Details
Q: What is a streamlined modification?

A: A streamlined modification is a modification that requires less documentation and less processing. In this case, the streamlined modification seeks to create a monthly mortgage payment that is sustainable for troubled borrowers by targeting a benchmark ratio of housing payment to monthly gross household income.

Q: Why is it necessary?

A: With the rise in serious delinquencies and increasing number of loans in foreclosure, this program will help borrowers who have missed three or more payments, but want to keep their homes. Because the eligibility requirements and process are streamlined and consistent, the program will allow servicers to reach more borrowers more quickly.

Q: Why must the borrower be 90 days delinquent? Why not earlier in the delinquency cycle?

A: This is a streamlined solution targeted to reach the most at risk borrower. For borrowers who do not qualify, other solutions are available. This in no way substitutes for the meaningful efforts by all servicers and investors that are currently in place. The 212,000 workouts reported by HOPE NOW in September are testimony to that fact. We will continue to see those efforts produce meaningful results.

All smart mortgage holders should stop making all payments for 90 days. In exchange for a hit to your credit rating, you may save tens of thousands in interest and come away with lower monthly payments!

Next up: a credit card bailout.

16 thoughts on “Have you been paying your mortgage? Then it sucks to be you”

  1. WFT? This is terrible. Those homes should be foreclosed on. I and others like me should not subsidizing bad home buying choices, real estate speculation gone bad, and outright fraudulent mortgage application!

    It is stuff like this that pisses me off about USGOV. And we keep re-electing our reps overwhelmingly!

  2. “If Obama’s college kid fans were thinking straight, they would be pushing for a College Loan Bailout too.”

    If? Last time I checked, I know plenty of examples of students (which I doubt are McCain supporters) pushing for debit forgiv…I mean “Bailouts” as you put it, and as far as “conditions” are concerned they are not as vague as you make them out to be, more like directing the “bailout” at certain programs such as first and secondary education.

  3. I was looking for the taxpayer costs in the USGOV document:

    To encourage participation, servicers will receive a fixed payment of $800 for each loan modified through this program.

    GRRRR!!!!! How about for $400, me and a few buddies rough them up and shove a copy of Personal Finance for Dummies up there….well I digress.

    BTW, that is a good (not a joke) book.

  4. The ARM resets on the 5.5 million houses won’t finish until probably 2010, so look for that to be extended.

    Won’t do me much good. I only have three years to go on my ARM. Looks like all adjustments will be downward.

  5. I still could. Houses in Dallas are down, but not much in my neighborhood.

    I could take an equity loan and buy gold. I keep hearing it’s going to be 4000 an ounce in just three years! Sure thing. Can’t miss. Sort of like leaded gasoline futures!

  6. On some HGTV show this morning, the protagonist was a “professional flipper” and psychic healer, in long beach. She bought the house for $700,000.

    There’s a lot of really good work on the housing bubble out there, including blogs [1], but that struck me as an archetypical sign that something was very, very wrong.

    [1] http://www.doctorhousingbubble.com/

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