The Deadman Night Rider

A forum for evening students of the SMU Dedman School of Law and other outlaws..

Monday, November 17, 2008

The sickness of houses continues

It's entirely possible the YouTube lady was right that she no longer has to worry about paying her mortgage. Under this new plan, if you're underwater or close to it, you can get your payment cut to around 38% of your income (through haircuts on the interest rate, re-fi over a longer period, or even principal write-offs):

Peter Schiff, president of Euro Pacific Capital, predicts that many homeowners who have little or no equity will stop paying their mortgage and then reduce their income to get the biggest payment cut possible. They could stop working overtime or, if two spouses work, one could quit. After the modification, they could try to boost their income again.

"This is a once-in-a-lifetime opportunity," Schiff says. "People are going to feel like complete morons if they don't participate. The people getting punished are the ones who never made an irresponsible decision to buy a house they couldn't afford."

The government is offering loan servicers $800 for every homeowner they get into the plan.

Understand me any better now when I say I wish I'd never left Aytrau??


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