Are You a Complete Moron?

My cynicism about the foreclosure bill I referenced last week on WINA is starting be proven justified.

Courtesy of the San Francisco Chronicle (hat tip Bloodhound) –

The streamlined process looks only at income, not assets. If you refinanced your home to buy a Mercedes or own another home, you won’t be expected to sell them to pay your mortgage.

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.

Schiff predicts that loan agents “will be cold-calling people trying to get them into it. Just like they encouraged people to overstate their income to get a bigger loan in the first place, now they will encourage them to understate their income to qualify for a smaller loan.”

Before you dismiss this as unnecessarily jaded cynicism, watch this video.

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  1. Todd Tarson November 17, 2008 at 11:09

    Oh my!! I knew I should have refinanced to buy toys. Darn my good judgment.

  2. Damon November 17, 2008 at 12:06

    I hate talking heads. They did the exact same thing with the dot com bubble and will continue to do it. It’s hard to tell which of them know what they are talking about. Run your business and finances by numbers not analysts.

  3. Thogek November 19, 2008 at 16:13

    Do I have this right? Our government is offering to bail out people from the results of their irresponsible behavior by encouraging more irresponsible behavior?

    And we (collectively) have the nerve to wonder who people are so irresponsible, these days?

  4. Mark December 1, 2008 at 11:59

    Amazing to see these folks laughing at Peter Schiff.
    Among his wise words:
    “Sometimes you gotta take the medicine.” “We should embrace this recession.”
    I don’t know why we’re trying so hard to avoid recession. America is great not because the GDP grows every quarter, or because the Dow goes up. The Constitution does not guarantee these things.
    Whatever the outcome, America will never be the same. At worst, socialists will continue to use this entire crisis as an excuse for a power grab. At best, we’re going to waste more of our kids’ future prosperity to prop up a bunch of lousy businesses. It’s like Food Lion got in trouble for many years back with old gray hamburger- they were wrapping fresh pink hamburger around the outside. That’s all we’re doing here.
    And the morality of rewarding the over-reach of greedy companies, lenders, and homeowners is unbelievable. As a saver who sucked it up and rented rather than get an ARM or IO on a house I couldn’t really afford, it makes me so angry.


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