Bear Stearns verdict: E-mails lose cred

1

Goldman CEO says he does 'God's work'

2

Ft. Hood killer: Pre-traumatic stress disorder

3

What up, White House?

4

'Times' advice for tough times: Give up!

By Ward Harkavy in Bernanke, College, Defaults, Featured, Homes
Monday, Mar. 16 2009 @ 5:51PM

Looking for ways to weather the recession — just in case Fed Chairman Ben Bernanke is wrong — you might want to heed the two suggestions dispensed by the New York Times in separate stories on Friday the 13th to just throw in the towel.

In "Thoughts on Walking Away from Your Home Loan," Ron Lieber makes a doomsday scenario sound almost, well, painless. Don't qualify for the Obama plan? Not enough income to pay your loans? Can't refinance?

So just stop paying. As Lieber says:

In an economic environment like this one, ... the consequences of giving up on your mortgage may not be as painful as they were a few years ago. Yes, it's almost always preferable to negotiate a better deal on your existing mortgage than to walk away. But if you can't work things out with your lender, you probably won't be sued. You shouldn't receive a major tax bill either. And the damage to your credit will not be permanent or insurmountable.

And don't fret too much about it. Though he's writing for the "Your Money" column, Lieber exhibits about as little faith in financial planners as one could possibly have:

If you have moral misgivings about not making good on your mortgage, a religious officiant may offer as much useful guidance as a financial planner.

Meanwhile, don't worry about setting a bad example for your kids, because here's another workaround for their future: Tell them to forget about college for at least a year. In another Friday the 13th piece, Jonathan D. Glater wrote, in "Delaying College for a Year Could Have Benefits," that even if Congress okays Obama's expanded college-aid plans, they won't take effect until a year from this July. So he says:

Here is a heretical idea for this year's high school seniors: Take a year off and go out and do something else. Then, when it is available, see if you can take advantage of that aid money -- more fixed-rate student loans and bigger grants to the poorest students.

Actually, the latter idea (delaying college) makes sense — even in good times, many Europeans and Aussies take a year to travel after they graduate from high school instead of rushing off to college to become investment bankers. Many U.S. baby boomers would have done the same thing (the year-off thing) if they hadn't been threatened with the draft during the Vietnam War.

Now, with no draft, no jobs, no home, no prospects, why not take a year off? Maybe Bernanke will be right and you can resume your dreams next year.