I know how to fix the housing market
Buy a home and get cold hard cash back
The housing market is a complete mess right now! But I have a simple plan on how to fix it. The plan of action is designed to force the U.S. Banks and Government to provide a lot more help to the people on Main Street vs. the people on Wall Street! Although there is more than enough blame to go around for the housing market mess, Wall Street certainly deserves a lion’s share of the blame, for basically playing Monopoly with other people’s hard earned cash! And the Government deserves a heavy dose of blame too, for basically watching it all take place and then doing nothing about it, until it was way too late! So, with that being said, I was always taught, as a kid, that when you make up a mess, you go back and you clean it up! So, the following will be a game plan, for exactly how we should go about cleaning up, our current housing market mess!
The code name for the housing market clean up, is The Re-Up Plan! Here’s how it works. The Banks will pay anyone $15,000 to reorganize all of his or her debt, with the purchase of a new home! You can also earn $15,000 if you reorganize all of your debt, with the refinance of an existing home mortgage. In either case, we can spread the mortgage out to 50 years! This would help make the mortgage payments much smaller and more manageable for most consumers. Because most banks would probably not want to mange 50 year mortgage loans, the banks could give an additional $10,000 bonus payments, to consumers who pay off their 50 year loans, in 30 years or less! And this $25,000 bonus payment, would come directly from the banks, who could afford to return this “chump’s change rebate” back to the consumer, after making nearly four times the purchase price of the selling home, in profits, after all the interest payments are made! With the U.S. Government backing everything up, it’s a win for everybody involved! Now, let me give a couple of specific examples of how this could all work!
Let’s say you have a 30 year fixed home mortgage of $500,000. And with that, let’s say you also have another $100,000 in personal debt! Your total debt load would be $600,000! Under the Re-Up Plan, you could use your house to leverage and refinance the $600,000 for 50 years at today’s low interest rates! When you close, you’ll receive $15,000 in cold hard cash! Now again, we understand that 50 years is a long time to pay off any loan! Hence, we’ll give people an extra incentive to pay off their loans in 30 years or less by giving them an additional $10,000, to pay off the loan sooner rather than later!
In example number two, let’s say you’re a first time homebuyer, with about $30,000 in debt! You’re looking to buy a house at about $150,000. At closing, you’ll look to finance about $180,000 over 50 years! At the close, you will receive $15,000 cold cash! Then you’ll receive an additional $10,000 if you can pay the entire loan off in 30 years or less! This plan would have a short window of opportunity! You make it a two-year program with a third year option if successful! You would also have to hold off on the Barney Frank Bank Laws, during the two or three year period of the plan, so that banks could relax their restrictions for home buying, so more people could potentially qualify for mortgages! But overall, this plan is ready to implement today and would not cost the taxpayers or the cash strapped government any money!