Essay on Recovering America's Economy

1007 Words 5 Pages
With the worsening economy on the forefront of most people’s minds, it is quite obvious that the strategy for turning this depression around needs to be changed. The effort and massive amount of money that has been used in attempt to stimulate the market has resulted in only temporary fixes. To cure the actual problem rather than treat just the symptoms, an out-of-the-box solution is clearly required.
At the root of this recession, I believe, is the falling housing market. The market confidence is so low because the property values have been continually diminishing. Falling property values have completely eroded the market confidence of many buyers who could buy homes. Bottom line, the market needs confidence and affordability.
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These loans should be approved or denied within 10 days of application. The buyer should be given a 30 day maximum to choose a home by fully completing a purchase agreement and then immediately proceed to closing. This increases the amount of buyers avidly searching for a home, and facilitates a quick close for both the buyer and the seller.
The second thing the government should commit to is creating a 3.99% 30 year fixed rate plan for refinances. People need to be able to refinance Adjustable Rate Mortgages that were taken out when the market was at its peak, which are now upside down. If people are able to refinance higher rate mortgages to a lower rate, this increases their spending ability, which in turn results in a snowball effect helping all of commerce.
I suggest making these loans available by online application for two weeks using a civilized lottery system. As the government sees how many applications are submitted, they will be able to decide to continue for as many weeks as necessary. This process needs to continue on as long as is needed to get consumer confidence back and the home sales market back in full swing.
I suggest that by using funding from Fannie Mae, Freddie Mac, or the Federal Housing Administration, money would be available to make many loans happen in a short amount of time. About $2,000,000,000.00 in loans per week ought to be approved, which in turn should subsidize about…