North Bergen, NJ October 13, 2008 -- Patrick Markert, Chief Executive Officer, Chief Technology Officer and Founder of Amerisave has put together a plan to solve the current housing crisis.
The AmeriSave Plan
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. The cost to the tax payer would be substantially less than all of the current plans that are in place to bail out the banks and Wall Street. This would help all Americans, not just Wall Street. 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. Our goal is to reduce the number of homes on the market and not to give people an incentive to sell their houses. Even if you were not able to purchase a new home, you would benefit because the homes values in your neighborhood would stabilize. Investors, second home buyers, and anyone else that does not already own a home would be very motivated to purchase a home. Many people are afraid to buy a home in this market, but this offer would encourage them to buy now. Furthermore, when people purchase a home they start spending on all kinds of products which would boost many sections of the economy. We must give people an incentive to purchase homes. Reducing the amount of homes on the market will result in the stabilization of home values.
What would happen after the program ends?
The number of homes on the market would be at an all time low. Due to the low supply of homes on the market, homes would begin to appreciate again. As homes appreciate, banks and investors would start lending to home owners with reasonable underwriting guidelines. As risk in mortgages begins to decline, mortgage interest rates would drop to under 6%. And Yes, Wall Street and the banks would benefit because the number of foreclosures would be back at an acceptable level.
Why is stabilization of home values so important?
Declining home values dramatically increases the number of foreclosures. If home owners cannot sell their homes for more than they owe and they cannot make the payments, then the only option is foreclosure. Unemployment is expected to rise to 8%, that's 1 out of 12 people without a job. This rise will have a dramatic effect on the number of foreclosures if something is not done about home values. When too many homes go into foreclosure, the banks and institutions that hold the mortgages fail.
Why are current government programs focused on the symptoms?
Currently all of the government programs are focused on helping the banks and institutions that hold these mortgages. This plan is similar to taking aspirin for a broken arm. If home values stabilize, foreclosures will drop back to an acceptable level which will fix the problem permanently for the financial institutions.
About Amerisave
Amerisave is one of the nation's leading and fastest-growing online mortgage companies, a Direct Lender serving customers in all 50 states and DC with more than 6 Billions funded in loans.
Contact:
Romulo Roma
Loan Advisor
Amerisave Mortgage
www.amerisave.com/partner/rroma
201-673-3834
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