Newly Proposed Government Loan Program to Bring Relief to All Homeowners

/PRNewswire / -- A newly proposed home loan program known as 4/40 for Freedom was introduced today to address the continuing housing crisis, as evidenced by the recent AP story "Mortgage Delinquencies Hit Record High (May 28, 2009)." The program calls on Congress to draft a bill to reduce interest rates on all home mortgages to 4 percent and give new home buyers a 4 percent, 40-year loan option, which would dramatically stimulate the economy, prevent any more "toxic debt" and put America back to work.

On average, housing represents 35 percent of total family expenditures. The proposed program offers hope to struggling homeowners because it immediately decreases the monthly mortgage burden. Expected savings with the program are approximately 33-38 percent per month per household.

"Americans are begging for relief," said Ken Parker, founder of 4/40 for Freedom. "The program benefits are immediate; lower mortgages means increased disposable income, which translates to available cash to stimulate the economy through investments and product and service purchases. We have received enthusiastic support from the financial and business community regarding the program," Parker continued.

The program is simple: for existing homeowners it would be available automatically -- no qualification process or credit report required. The existing loan would be modified to a 4% interest rate, 40 year term, with no credit check. For foreclosed owners and first time buyers, the program offers a no nonsense qualification and application process, similar to FHA. Jumbo loans would also be offered, up to 3.5 million. Once passed by Congress, the program would be available for one year. As the economy improves and home values go up, homeowners will refinance with conventional programs and the U.S. backed real estate interest loan debt will be repaid, resulting in additional economic capital.

The Seidman Research Institute, a part of the W.P. Carey School of Business at Arizona State University, has produced a cost report regarding the 4/40 for Freedom program and it is available for purchase, along with bumper stickers and additional support material at www.4-40forFreedom.com.

Parker states that it is in the opinion of many business leaders that the money that is saved on interest will have an economic multiplier effect of three to five times the amount reinvested back into the economy. "If each homeowner saves an estimated $250 a month on their mortgage, all of a sudden they can make additional purchases and the effect on the economy will be tremendous," Parker said.

Nationwide, homeowners are being asked to sign an online petition to show their support of the program through the 4/40 for Freedom Web site, www.4-40forFreedom.com, which will then be taken to Congress.

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