Rescue this!

I advise my clients who have mortgages that they cannot pay, especially if they owe more than the house is worth, to stop paying their mortgages!

Sounds kind of radical, you say.

But when you understand what the financial system has done to these homeowners, you will be able to understand it.

It’s just a matter of self-defense, financial self-defense.

Wall St Unions; banks, investment houses, bond insurers, bond rating agencies, etc. conspired in true racketeering style to produce fraudulent financial instruments and then foisted them on unsophisticated borrowers.

Uncomfortable with the word, fraud? Fraud is “deception done for personal gain,” according to the dictionary.

Rating subprime mortgage-backed bonds as investment grade, AAA, for charging fees, is a good example.

Issuance of insurance; credit default swaps, with no assets backing them, to collect fees, is another example.

Deliberate falsification of data on mortgage applications to charge fees is another example.

Without these key fraudulent practices of the mortgage and financial industry, the subprime mortgage debacle could never have happened.

Now that the mortgage mess has blown up “inextricably” in the banks’ noses, essentially putting them out of business; they demand that the homeowners they have defrauded continue to honor their commitment to pay off their toxic mortgages and now bail them out with trillions of taxpayer dollars.

As one Wall St bigwig said: “Banks are too big to fail and the landlord is too small to bail it out.”

Then the battle lines are drawn. The banks, on the one hand, want to drain your own lifeblood to keep you paying your mortgages, while they steal from your children and grandchildren by blackmailing us and getting trillions of our dollars to pay for their losses so they can stay afloat.

These massive loans and cash injections will produce huge deficits that will be passed on to future generations.

Unfortunately, there is no bailout for the homeowner, just half-hearted measures like loan modifications that fail to solve the borrower’s problems.

Look at the widely touted Hope for Homeowners bailout plan. It was projected to save 400,000 homeowners from foreclosure. Only 312 loans were modified. And we now know that more than half of all borrowers whose mortgages have been modified have returned to default in less than 6 months.

Changes are not the answer. Cutting the balance of outstanding loans to 80% of the current market value of the property, as was done in the First Great Depression, is a much more effective remedy, as it establishes a payment level that the borrower can afford.

Therefore, in the absence of willingness on the part of banks or the government to bail them out, borrowers are forced to fend off unscrupulous banks. It’s really a case of financial self-defense. You know where the banks come from, it’s up to you to fight them.

It’s enough that most of these troubled borrowers, especially the 15 million or more who are “under water” who owe more than their home is worth, will lose their homes one way or another.

That’s your penalty for taking out a loan without getting the advice of a financial professional or being represented at closing by your own attorney; not the mortgage broker’s or real estate broker’s attorney, at the time of closing.

But it shouldn’t mean they have to squander their life savings, retirement accounts or their children’s inheritance to lay the blood banks.

As a seasoned real estate investor, former bank loan officer, and Personal Financial Coach assisting struggling homeowners, I have many people in this situation.

My advice to them is to stop paying your mortgage, don’t give the banks another penny of your hard earned money.

Then we show them how to stay in their homes for up to two years or so without paying a dime to the banks so they can accumulate some money to start over. In some cases, banks pay my clients thousands of dollars to leave the premises.

What about the eventual foreclosure? Won’t it hurt your credit?

Yes, it will, but they would be in the same credit situation when they finally lost their homes.

Their choice is to be evicted from their home penniless, after depleting their life savings, or with their savings intact and a few dollars to go on.

Plus, when the dust settles, they’ll be able to buy a home for less than half what they paid for the one they lost, according to expert experts.

If the banks and their government representatives don’t bail out the homeowner, he must bail himself out, period.