Saturday, October 23, 2010

Perverse Incentives

The Chicago Tribune has a sad story about a family caught up in the housing collapse. They thought they could qualify for a re-setting of their monthly mortgage payment under the terms of the president's Home Affordable Modification Program.

But they made the mistake of being thrifty while they were waiting for approval:
The family's $7,160 in savings, including a $5,218 income tax refund, accumulated during the year it took the bank to review the application, meant they were too well off to qualify.
Too well off to qualify. But not well off enough to keep their house.

In retrospect, they should have blown their money
on... whatever. And no, it's not really funny.

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