Saturday, November 5, 2011

An Equitable Mortgage

I'm a "systems guy." I look at cause and effect. Unintended consequences.  Processes.
We hear in the news crazy stories of about foreclosures where the entity holding the paper cannot be identified. A huge part of the "mortgage crisis" came from lenders writing mortgages that were just bad. The market was in a frenzy and the political environment encouraged home ownership.

At the height of the lending frenzy, I was approached multiple times per week by the shadiest sorts of agents who were willing to put me in a house. I've been dealing with tax issues for over a decade and could not guarantee that I could make payments. I was assured that that would not be a problem. Because I earned a good amount of money, anything was possible.
Never mind that I run my own business and my actual profit is a tiny fraction of my "earnings."
Never mind my credit was in the toilet.
I would have to fight off these opportunistic sales weasels and say "no" to these insane offers.

I can totally understand how someone less informed would jump at the offer to get into a house and start rebuilding credit.

But enough of the history, on to my proposal:
Mortgage contracts have two parties. But only one seems to have any power. The homeowner cannot arbitrarily transfer the loan or deed without permission of the bank. So why can the bank?
Let's keep the imbalance caused by the money, but require written permission by both parties to modify or transfer the loan.


  1. Fixed mortgage rates are a good idea if the interest rates are low. Ideally, homeowners would buy their properties when the interest rates are at reasonable levels. This is not always possible and during times of high interest rates homebuyers often choose to get variable rate mortgage loans.

  2. I like it. The banks have had too much power without and balances to make them responsible for that power. This is basically a recipe for abuse, and we certainly saw it happen. I think your solution would definitely help. Give some of the power back to the homeowner.


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