Human beings are… of two persuasions;
the first would spend tomorrow what they earn today,
the second would spend today what they hope to earn tomorrow.From this…arise all conflicts that lead to economic crises,
to panics, depressions, violent and revolutionary transfers of wealth,
and perhaps most wars.Freeman Tilden
Why the IRS is About to Set Off a New Wave of Jinglemail
The government's new way to speed up mortgage refinancing may result in an explosion of foreclosures.
IRS form 4056, which becomes mandatory for all applications on June 1, permits disclosure of IRS tax data to banks and streamlines the approval process with a quick equation.
Blogger Bruce Krasting summarizes:
I) Show me yours and your spouse's tax return. We add those numbers up and multiply by 31%. That will be the targeted debt service for you.
II) If your income is equal to 31% or higher take a hike.
III) If your income is less than 31% you may apply. But if your income is only 24% (example) then there is nothing we can do for you, Sorry.
While speeding up the debt relief process for some, the form is likely to wake up many Americans to the fact that refinancing is not an option.
Some … will realize they earn too little to qualify for debt relief; and others will realize they earn too much.
The last group will be the most likely to default, as these are middle class Americans who will finally recognize that their over-ambitious mortgage is costing more than it's worth.
Gus Lubin
Business Insider
2/4/10
On the IRS, Tax Season and Foreclosures
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2 comments:
"Some … will realize they earn too little to qualify for debt relief;" This makes sense to9 no one but the US government but you will find it thru out most government programs. BB
DSR and FOR are two debt servicing stats available from the Federal Reserve. One represents ownwers, one represents renters. There is no panic yet, but this group hasn't recognized the dead canary, which should be the Fed's mascot. The S&P removed debt service from costs which "improved" PE ratios 6 years ago. Thanks for posting the wisdom of the ancients on a blog, George.
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