“Jingle Mail”

A phrase credited to Jim Fleckenstein, “Jingle Mail” is “where homeowners have mailed in the keys because they can’t make the payments and no longer have any equity in their homes.” Based on Mish’s latest analysis of the FED moves, “Jingle Mail” may be the new phenominum.

The FED has reduced rates by 1 3/4s and mortgages follow the 10-year Treasury, which has fallen from 4.7% to 3.5%. This time though 15-year mortgages have fallen by just 62 basis points from last year and 30 year mortgages a mere 34 basis points lower than a year ago. That means the Fed’s moves haven’t helped me. If the 30-year goes low enough, I can refinance, pull out equity and continue spending. Mish writes,

Thus, the only people really benefiting from this drop so far are those currently in interest only mortgages, pay option ARMs, or other ARMs specifically tied to short term LIBOR. For those in Pay Option ARMs, this benefit may do nothing but postpone the day of reckoning. This is especially true for Option ARM holders who are only able to afford the minimum payments and are going deeper in debt every passing month due to negative amortization.

Calculated Risk carries a cute little video that explains the problem many are facing:

If you agree that the government needs to do something to keep the economy from going into a recession, we need more than a $800 per person handout. Some have argued that President Bush’s proposed $140 Billion bailout is too small. I believe Hillary Clinton saw his $140 Billion and raised to $240 Billion. I like Rush Limbaugh’s idea. American consumers owe $915 billion in credit card debt. Why not have the government pay it off for us. It would be like hitting a reset button, getting back to zero, so to speak. No pain and soon Americans would be spending again.

Might avoid a lot of “Jingle Mail”.

Jingle Mail Federal Reserve Mover Mike

2 Responses to ““Jingle Mail””

  1. Hey, if you are seriously considering jingle mail – I had to do it in 2004 – and I want you to talk to me about all the consequences here: http://foreclosuremine.blogspot.com/

  2. First mortgage $220,000

    Second 50,000

    Home value dropped below 220,000

    Now the IRS has informed me of a taz error in 2005. I owe the IRS $30,000. Funny thing is they want to put a lien on my house. I say take it!!!

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