Should They Risk Missing a Payment?

4 comments

You can see the fine hand of government at work in the homeowner rescue package that has been struggling to get off the ground since its inception last spring. The goal was to  reduce foreclosures by lowering mortgage payments for homeowners who were struggling.  But struggling how badly? For would-be lenders, that can be a tricky question to answer, and they are understandably reluctant to commit to the program without clear guidelines from the federal government. As it stands, some homeowners are being told they cannot receive help unless they fall behind on their payments.  But if you were struggling yourself to stay on track, would you take the risk of skipping a payment or two just to qualify?

 hand

That’s the dilemma facing millions of homeowners, and one we anticipated a while back in the Rick’s Picks chat room. When the program was announced, we suggested half-facetiously that subscribers start omitting mortgage payments now and then in order to secure a seat on the gravy train. It was not entirely in jest that we broached the idea, since that’s the way government programs work, favoring basket cases over those who are managing to scrape by on their own, however precariously. Now, it would appear, the merely beleaguered are being advised to look more like basket cases by skipping payments.

Waste and Corruption

As for the three or four million homeowners who supposedly will be helped by the program, so far only about 200,000 reportedly have benefitted. We shudder to imagine what it will take to bring the others on board, since the waste and corruption associated with any government relief program seem to grow exponentially as “clients” are added.  In the meantime, if you think you might have problems paying your own mortgage in the future, you might want to apply now, since you could face lengthy delays in getting approved. In fact, the delays are already so long that borrowers who are current when they ask for loan modifications are delinquent by the time they receive them.

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  • John Steinsvold July 30, 2009, 3:09 am

    An Alternative to Capitalism?

    The following link, takes you to a “utopian” article, entitled “Home of the Brave?” which I wrote and appeared in the Athenaeum Library of Philosophy:

    http://evans-experientialism.freewebspace.com/steinsvold.htm

    John Steinsvold

  • rich July 29, 2009, 2:58 pm

    Similar for the clunker car credit.
    Nice call on FXP.
    Due to derivative time wasting aspect, like FAS, may not hold it too long.
    Most brokers may not allow shorting FXI.
    Ameritrade, E Jones, LPL and UBS banned leveraged ETFs effective next week.
    After many custodians called in shorts, causing the big squeeze rally.
    Selling GS below 166.42 might be emblematic hereonout…

    http://www.financialpost.com/story.html?id=1826859

  • nitram July 29, 2009, 11:43 am

    If one had bought “FXP” like I advised yesterday, this morning the mortgage payment wouldn’t be a hassle. Now I suspect the contagious selling of stock will move to other stock markets. The eclipse will have a delayed reaction. watch dates 8/4/09 – to 8/10/09, me thinks it could be very negative for all markets BUT the dollar. dollar 83-84 then down she goes and one better own some physical gold after she turns down.

  • Tahoe Billy July 29, 2009, 12:44 am

    Rick,

    What about “how to” e-book selling online “100 ways to get ur own home mortgage bailout in 5 simple steps”! $39.95 on ebay.

    William


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