Sometimes I get these so called “Bright Ideas” in my head that should be shared with politicians and power. This is one I call “The American Dream Loan.” Basically, it’s a 15 year home loan program for the middle class that limits the amount of the loan repaid to a maximum of 50%. The government is the owner of the property and it permits the next generation to experience the American Dream. How does it work?
Homes ranging from 150K to 200K are aquired by the government and sold to credit worthy individuals trying to make the American Dream a reality. The amount of the loan is guaranteed by the property and the advantage of limiting the amount repaid is passed on to those most at a disadvantage in society. If a house is $150K the total loan repaid is $225K over 15 years. This payment of $1,250 a month is about what the average individual pays for rent. The government makes $75K and the individual gets the benefits of home ownership in 15 years or less.
In short, this competition in the banking industry gives a helping hand to the first time buyer and the poor. It permits the weakest individuals to establish credit and a chance to learn how the success game is played. It puts people into ravaged communities facing economic crisis. The program would require a financial mentor. This sounds to me like it could be a stimulus package for main street that prevents Wall Street from exploiting the weakest of the weak. I think it’s a “Game Changer.” What do you think? Do you want one? Wouldn’t it be great to know your children finally have an equal opportunity? Home ownership is “The American Dream.” We can if we truly want a successful future.
January 30th, 2010 at 5:17 am
I’ve been really thinking about the Home Loan Business and I’m concerned. What if the value of the house in a projected number of years doesn’t equal the amount of financing and the property value? The individual is “upside down” because nobody guaranteed the value of the home to increase with the amount of financing. Individuals are forced to pay 180 to 200% of the home’s cost just to get financed. Why is this legal? The sale is final and the price of the loan should be limited to a reasonable rate. The American Dream in it’s current state is a nightmare that begins upside down with no guarantee of recovery. That’s wrong. Financing should be limited based on projected value at 30 years. Should value of loan and property ever exceed limits of property value with appreciation? Isn’t this the cause of the mess we are in financially? Fix it?
February 5th, 2010 at 7:47 am
We have over 700 Billion dollars in TARP funding waiting to be used to help main street. Buy some “Troubled Assets.” Refinance these mortgage loans limiting the cost of the loans to a range of 25-50% of the home’s value. Let the people in the home have first crack at ownership. If they can’t afford the house under this refinancing program let someone paying years of rent experience the “American Dream.” This gives new meaning to “Government Owned Housing.” The money saved on financing costs would be a shot in the arm to main street and it would keep the people in homes. Can anyone say, “Baco, Nobel Prize?”