Seriously.

Assuming your home is worth equal or less on the market today than your outstanding mortgage balance, of course.

You deserve to live free for a year, and you deserve to have your home price come way down so you can buy it back in a few years for much less.

You've already been taxed to the tune of $700 billion for a bailout for the bankers, even though you told Congress "no".

Now the FDIC and Treasury are "working on a plan to curb foreclosures."

In return I recommend that every American with a mortgage immediately stop paying.

Today.

Whether you can afford it or not.

Consult with an attorney and CPA, in the same room before you act to make sure your specific mortgage (and the state in which you live) is a "non-recourse" loan and to understand exactly what impact this will have on you (it will come with a significant impact, most specifically to your credit rating!  Hear me out - you may find that this course of action makes perfectly good sense.) 

See, in many states purchase-money first mortgages are "non-recourse", meaning that all they can do is ruin your credit and foreclose on your house.

That's it. 

They cannot force you into bankruptcy, they cannot garnish your wages.

And from the time you stop paying until the time you get evicted, you get to live there for free.

Finally, after you have been foreclosed upon, your house (and lots like it if your friends and neighbors do likewise) will drop dramatically in price.  Presto!  In a year or two you will be able to buy it back at half what you paid for it in 2004 or 2005.  Now that's a bargain.

So give the government and the banks back what they're trying to give to you - a royal screw job.

After all, they intend to give your neighbor who behaved imprudently a bailout, and if you were prudent, unless you suddenly become imprudent, you're going to get screwed in the form of being taxed to buy his home for him:

"The program, which might help several million homeowners refinance into affordable loans, would require lenders to restructure mortgages based on a borrower's ability to repay. Under one option, the industry would keep lower monthly payments for five years before raising interest rates, the people said. "

Got that?

If your next door neighbor lied about their income to get their house, or took out an exotic "Option ARM" mortgage and can't afford their payments, they will get a big fat bailout.

You will, in fact, get his mortgage bill.

Unless you intentionally default, in which case you will still get to pay taxes, but you won't pay your mortgage, and thus, you won't pay twice.

Your neighbor who goes for the government's "deal"?  He gets it in both eye sockets.  See, a refinance, which this is, converts your mortgage into a recourse loan.  That means if you take their "great deal" and then default later on (e.g. you lose your job in the upcoming Depression) your wages can be garnished forever and, if you earn more than the median income, you can't even get rid of the debt in bankruptcy.

So if you were a prudent homeowner, you want to intentionally default so you will at least get a lower house price, and therefore lower mortgage payment, plus a year or more of free living between when you stop paying and the bank completes foreclosure.  Oh, there's a chance the bank never bothered with the paperwork, they won't be able to prove you actually owe them the money in court, and if that's the case there is a small (but non-zero) chance you might get a free house out of the deal.

If you're imprudent you definitely want to intentionally default right now because the absolute last thing you ever want to do is convert a mortgage into a recourse loan, and that is precisely what taking the government's "help" will do - it will bend you over the table.  You too will get a lower house price and lower house payment, plus a year or more of free living between when you stop paying and they complete foreclosure.

Oh, and it gets better.  Today, the Federal Reserve (without an act of Congress appropriating foreign aid) decided that extending its "swap lines" to South Korea wasn't enough.  No, they now are going to funnel $120 billion (of your money, again, without an appropriation by Congress) into not only South Korea but also Brazil, Singapore and our lovely "neighbor" who has sent us 20 million illegal aliens, Mexico.

That's right, The Fed has decided to back debt they may have (who knows how good it is) with currency swap lines, backing that $120 billion line with the Treasury's ability to extort money from you at gunpoint through taxation for the entirety of your, your children's and your grandchildren's lives.

Nor does it stop there.  We now have reports that two industry groups - the Regional Bond Dealers Association and The Education Finance Council - have requested that Treasury back yet another $600 billion in auction-rate and demand notes.  Yes, another $600 billion (I'm losing count here guys and dolls!)

This insane debt bubble's creation in the first place was fully sanctioned by Treasury, The Fed, and The Banks.  All of it.  The entire thing has been and is intentional, and these people are and will continue to screw you and your children blind as a taxpayer in a vapid and outrageous attempt to keep those who wrote all this bad paper from having to eat it.

Of course there is no way to prevent someone from eating it, and that "someone" has just been designated as you, the taxpayer.

That's right - the bankers, with full knowledge of The Fed and Treasury, raped, robbed and pillaged America, making loans they knew there was no way to pay back, and now, having paid zero attention to credit quality for a decade, our government has decided that instead of those imprudent people (on both sides of the table) going bankrupt they're going to stick all of America, including and especially those who did nothing wrong, with the bill.

This hasn't gone unnoticed by the credit default swap folks.  The cost of insuring Treasury Debt - that's right, United States Treasuries - is forty times as expensive as it was in early 2007.  Of course if that risk of default is ever realized, our way of life in America ends. 

Literally.

There appears to be exactly one way you can make sure that this idiocy either is stopped or you are not disadvantaged compared to your speculating neighbor across the street, around the corner or down the block.

The only way to do that is to intentionally default on your mortgage.

I am tired of the being told that I, and my daughter when she grows up, should pay taxes so that bankers can get $70 billion in bonuses, so banks can use my tax money to buy other banks up like vultures feasting on roadkill and so that the guy down the street from me who took out an exotic mortgage to buy a house he couldn't afford can extract $200,000 or more from me and the rest of us in this nation - and keep his house.

That is outrageous, it is unjust, and in fact it is nothing other than raw theft, literally at gunpoint.

And yet it is what both Presidential candidates intend to do and what our current President is doing, along with the FDIC, Federal Reserve and Treasury, instead of forcing those who imprudently purchased, along with those who imprudently lent money to absorb the defaults themselves and go through bankruptcy - which is what is supposed to happen when you do imprudent things.

Since our government continues to pursue the idea that everyone from the imprudent speculator and even the fraudulent buyer who overstated his income, along with the bankers who literally stole billions, can and will be allowed to rip off the public treasury, creating tax burdens forever for ourselves and our children in a futile attempt to prop up home prices along with screwing future buyers by keeping homes unaffordable, I am forced to advocate that you, The Prudent American, do back to the bankers and your neighbor what the bankers and your neighbor did.

Let's look at the math.

Assume your mortgage payment is $2,000/month.  If you stop paying and it takes a year to foreclose and toss 'ya on the street, that's $24,000 you keep in your bank account (again, assuming we're talking about a non-recourse situation - you DO NEED TO CHECK FIRST.)

One criticism is that people have said "but nobody will rent to you with trashed credit."  Bull.  First, last and security on the table for a $2k/month rental leaves you $18,000 in cash still in your account from your bit of "give it to 'em." That's the offset to your trashed credit.  Yes, future credit access will be severely impacted (for as long as 7 years, and in some cases longer), but when your credit card company tries to jack your rate, close the card.  They can't impose the new rate on existing balances in most cases and you still have the $18,000.

As a renter you also only need contents insurance - no structure insurance and property taxes are part of your rent, so no escrow for that either.  How long does $18,000 last as a "replacement" for your credit cards?

Again - this is situational and not everyone will benefit from this strategy.  But a lot of people will, and the banked cash during the year-ish time you don't pay until you're kicked out is not small potatoes.

I repeat: Make sure you "get yours" by intentionally defaulting on your mortgage, but before doing so, consult with competent accounting and legal advisers.  This only "works" in the situation where the mortgage is non-recourse, and you are effectively trading your credit score for the money you don't pay in mortgage between when you stop paying and are ejected from the house.

I know, its a radical step.  And one more time, you need to consult with both a CPA and attorney before taking any such step - spend the couple hundred bucks to get both in the same room and go over exactly what this entails and what sort of impact it may have on you.

But it would appear to me, at this time, that this is the only way you can recover at least some of the tax burden that you have been thus far and will be in the future assessed for our government's idiocy and pernicious theft of taxpayer dollars.