Should We All Just Stop Paying Our Mortgage?

16 Oct

moonWith all of the money the Govt. is throwing around, I want to ask one question that everyone like me is asking – What about those of us who have done all of the right things? Those of us who have been keeping up on our mortgage payments. Those of us who aren’t over-extended. Those of us trying to live within our means only able to fullfil our wishes with the help of loan lending companies like Achieve Finance. If the Govt. is in the mood to bail-out everyone, shouldn’t we all just stop paying our mortgage? Think about it. The Govt. has now taken the step to nationalize the mortgage industry. If I stop paying the mortgage, they won’t foreclose on my house. They can’t afford it. There will be a moratorium on foreclosures anyway! Then, after not paying the mortgage, I would fall into that category of struggling homeowner and the govt would be there to help me out. All of a sudden, as soon as I become irresponsible, the govt will be there to help me out.

What are the consequences? Well, first, I would save my largest debt payment. That’s over $18,000 per year. That’s a nice savings account. Second, with help from my friend at www.freshloan.co.uk – I could negotiate a new loan based on the actual value of my home – which keeps going down. My credit will be marred but I have so much credit available to me right now that I don’t need any more. And – more than likely, the govt. will wipe out any bad credit reports to make it easier for me to borrow again (they need me to keep borrowing). Is it worth it for the amount of money I would be saving?

It’s an entertaining thought. So – politicians – what is your answer? Should I become irresponsible so I can get the govt. candy?

I’m not the only one thinking this way.

Economic Fear and Personal Responsibility

15 Oct

Dave RamseyAs I listen to the news I am struck by the lack of personal responsibility among everyone involved in this financial crisis. From the politicians who advocated the wrong positions years ago that encouraged the bad behavior of the banks and those who borrowed more money than they could repay. If you listen, everyone is blaming everybody else – without taking any blame themselves.

The politicians have a knack to vote in such a way that they can claim they were for something if it turns out good, or against something if it turns out bad. Of course, they are never responsible for any position they hold.

The banks are blaming everyone. The people they lent the money to aren’t paying the money back. The assets that support the loans are being devalued. Never mind that they lent money to people who shouldn’t even have qualified for the loans in the first place. They took the risk – now they don’t want to live with the results.

The people who borrowed more money than they can pay back. How may people borrowed money with adjustable rate mortgages that once adjusted couldn’t afford them anymore. They are blaming the banks for getting them into an adjustable rate mortgage. I even heard a story of Oprah’s Mom saying that the bank shouldn’t have lent her any money. They should have known better!

Where is the personal responsibility? Shouldn’t we all get our own financial houses in order? If you borrow money – it is your responsibility to repay it. If you can’t repay it, you shouldn’t borrow it. If you are going to borrow money over a period of 30 years – you should make sure you will be able to continue to make those payments for 30 years. If things are getting a little tight financially – who says you can’t work two jobs?

If you are a lending institution – why are you lending money to people who can’t pay it back? I have heard stories of banks lending money to people without jobs! Incredible! Lending standards need to be tightened. Does that mean that some people won’t be able to purchase a house? Yes – until they get their own financial houses in order. Depending on their own situation – it may always be more economical to rent than to buy. A good way to determine this is to use one of many rent vs. buy calculators like this one.

If you are a politician – God help you. Please support policies that limits Government intervention into our everyday lives. History is rife with examples of situations getting worse when government gets involved. Does the government really need to own banks? With government printing all of this bailout money – can this be good for the economy? I don’t think so.

Anybody and everybody should stop right now and embrace a dependency on God. I just read a post by Jeff Leake at the LaunchPad where he paraphrased Dave Ramsey. In it, Dave said that we should “shake off the spirit of fear and declare our dependence on God, who is far bigger than this economic crisis.”

Speaking of economic fear – the news keeps harping that home values are going down. Who does that really affect? Anyone trying to sell their house or refinance their house, right? If you are currently in your home, and planning to stay there for a long time – it doesn’t really matter does it? As for me – I’m actually looking forward to protesting my valuation for property tax purposes. If the value of homes are going down, I definitely want to pay lower property taxes! I’ll use the savings to add an extra payment toward debt elimination!

Perspective

8 Oct

As our own financial world crumbles around us, it could be worse. I just read the following…

This week while many people in the United States were fretting over the credit crisis and its effect on their 401Ks, Christians in the Indian village of Sindhipankha were mourning the death of their friend Dushashan Majhi. A bold Christian, he was shot on Oct. 3 by a band of Hindu militants who then cut his body into pieces.

The people in Sindhipankha do not have 401Ks. Many of them, in fact, no longer have homes. Across the state of Orissa, in northeast India, Hindus have ransacked and burned hundreds of Christians’ houses and churches during the last two months. Hundreds have died.

“The violence in August and September of 2008 has been the worst in our 2,000-year history in India,” says John Dayal, an Indian journalist and founder of the All India Christian Council. “Fifty thousand are homeless and 30,000 are hiding in forests, chased like animals by Hindu fanatics who are forcing them to become Hindus or die.”

The number of deaths continues to climb in India while most Americans are consumed with the stock market and the Obama-McCain contest. (You won’t hear too much about the anti-Christian attacks from the mainstream media.) I wonder: Could we call a brief timeout and pray for the persecuted church on the other side of the world? more…
from Fire In My Bones – J. Lee Grady

Reading that article grounds me. When was the last time a Christian was hacked to death in America? Are Christians in America hiding in fear for their lives? When you are facing death – a drop in our 401Ks seems pretty minor. It’s all about perspective.

Is Obama Lying?

7 Oct

I try not to be political on this blog but I am just amazed that during this presidential election, Obama has been given a pass in the press… I was just amazed then to see this on YouTube by CNN.

Cash Is What We Need!

1 Oct

cashI don’t claim to be the smartest person in the world but it seems that the solution to this is to get cash flowing. Right now, the people who need cash don’t have it and the people who have cash are hanging on to it. Regardless of how we got here, something has to be done. Here is my suggestion:

  1. Suspend capital gains taxes for at least 2 years – retroactive to the first of the year – this would encourage more investment (i.e. cash)
  2. Reduce corporate taxes – right now corporations are paying a very high tax. I know – I used to own a private corporation! Lower the rate to 10% or even 15% for a couple of years. That would free up some cash and spur growth.
  3. There has been some talk of insuring the bad debts instead of just giving them the $700 billion. That, to me, would be a much smarter course of action. How does that work? When I got my first VA loan, the loan was backed by the federal govt. The bank still held the loan but in case something happened, the fed govt insured the loan. This could happen to the current mess.

I’m sure there are other ideas out there that make sense also – I can only speak to what I have experience with. I know the effect the above steps will have on the economy would be positive.

The second part is that we need to “Enron” all those involved in Fannie Mae, Freddie Mac and any other company involved in this fraud. I am discouraged that I don’t see any hint of an uproar over the failure of either one. From everything I have heard, they did the same thing to their balance sheets as Enron did.

Now – would a certain Maverick please step up! Someone has to lead!

I’m Tired

21 Sep

Corporate Cup Run 2008Sometimes I do things that I later wonder why I even attempted such a foolish thing. Today was one of those days. I signed up to run a 10K. That is 6.2 miles for those metric-challenged. It was the Corporate Cup Run in Omaha. I am not the fastest runner in the world but my main goal today was to finish the race without walking. I accomplished my goal. It is the farthest I have ran since I was hurt in 1991. Last year I was running every day – at least an hour a day, but this year, I don’t run as much. When I do run, it is a struggle just to run 45 minutes so today was indeed a challenge.

I’m sitting at home now – almost unable to move! 🙂 I knew it would be like this but I accomplished my goal. All of the pain I feel now is completely worth it because I accomplished something I set out to do.

Isn’t that how we should live our lives? Set a goal and no matter how much it hurts, or how long it takes, keep pushing until you achieve your goal.

For those keeping score – I ran nonstop for 1 hour 38 minutes! Like I said – not the fastest hare in the pack. More like the tortoise.

*** UPDATE ***
Official time results were released and I wasn’t as slow as I thought I was! Official time was 1 hour 36 min 41 sec.

*************