AmeriSave Plan

by James & Miel on October 12, 2008 · 0 comments

Hi Folks,

I got an email from a contact at AmeriSave about a plan they have proposed to stabilize the economy and help the housing and financial crisis level out. After nearly ignoring the message, I checked out the plan and thought it has a great deal of merit. You can read the full plan yourself, it isn’t long, but here are the basic tenets of it.

  • Fannie Mae and Freddie Mac (now controlled by the government) should offer 30 Year Fixed mortgages at 4% for the next 6 months for the purchase of a home.
  • The result would be that qualified borrowers that purchase a home in the next 6 months would get a 40% discount off their payments for the next 30 years.
  • This would start a buying frenzy which would result in the majority of the homes on the market today being purchased.
  • This program would not apply to borrowers that had sold their homes during the 6 month period, because we would not want people to put their homes on the market in the hopes of buying a new home at this low rate.
  • Even if you were not able to purchase a new home, you would benefit because the homes values in your neighborhood would stabilize.
  • When people purchase a home they start spending on all kinds of products which would boost many sections of the economy.

The plan goes on to give some details on what the long term effects on the economy and housing market would be.

Overall I think that they are on to something. For instance, as regular readers would know, we are working on saving up for another investment place. Given the current market we are focusing on saving and won’t buy until we feel confident in the market. With a plan like this though, they would have potential buyers like us out shopping.

Readers: We’d love to hear your thoughts on this proposal.

Best,

Miel

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