My wife suggested to me the other night that one way out of the foreclosure crisis for many could be the Government/IRS allowing individuals and couples who are in danger of imminent foreclosure to withdraw all IRA and/or 401(k) funds on deposit tax and penalty-free on a one-time basis for the purpose of bringing their mortgage current, and/or paying off any deficiency on their home mortgage (1st and/or 2nd lien). Her rationale is that this would be a more sound fiscal solution to the foreclosure crisis than a moratorium on foreclosures — which she believes would tend only to encourage people not to pay their mortgage payments during the pendency of the moratorium.
I do love this woman, my friends. I like her idea too. How about you? Yes, it will cost the taxpayers lost revenue from penalties and interest on early withdrawal of IRA and 401(k) plan assets. But wouldn’t you rather spend our taxpayer dollars helping people avoid foreclosure than giving it to wall street finance firms as a reward for their bad behavior? MITHOP = Money In The Hands Of the People . . .
Just say NO to the bailout . . .