Comments on: More Rules to Avoid Another Housing Mess http://blog.heritage.org/2008/04/18/more-rules-to-avoid-another-housing-mess/ Tue, 14 Feb 2012 19:53:39 +0000 hourly 1 http://wordpress.org/?v=3.3 By: Kevin Delaney, Utah http://blog.heritage.org/2008/04/18/more-rules-to-avoid-another-housing-mess/#comment-5161 Kevin Delaney, Utah Wed, 10 Sep 2008 22:22:07 +0000 http://www.foundry.org/2008/04/18/more-rules-to-avoid-another-housing-mess/#comment-5161 I was thinking that an interesting way to resolve the Mortgage Mess would be to switch from a system of mortgages to a system of shared ownership: (<a href="http://blog.yintercept.com/2008/09/shared-ownership.html" rel="nofollow">blog post</a>). In the mortgage model, people take out a loan and owe money on that loan. A shared ownership model is more like the stock market. The bank would own a portion of the house. The person living in the house would gradually buy larger portions of the home (or land under the home) at market rates. Shared ownership shares the risk and rewards of ownership with the investor that buys a share of the ownership. One could resolve the current mortgage mess by taking the at risk mortgages in a region, reconfiguring the loans as share ownership products then sell bundles of ownership in stock market type auctions. As the bank and home owner are sharing the risk, shared ownership reduces the need for re-insurance programs like Fannie Mae and Freddie Mac. I was thinking that an interesting way to resolve the Mortgage Mess would be to switch from a system of mortgages to a system of shared ownership: (blog post).

In the mortgage model, people take out a loan and owe money on that loan. A shared ownership model is more like the stock market. The bank would own a portion of the house. The person living in the house would gradually buy larger portions of the home (or land under the home) at market rates.

Shared ownership shares the risk and rewards of ownership with the investor that buys a share of the ownership.

One could resolve the current mortgage mess by taking the at risk mortgages in a region, reconfiguring the loans as share ownership products then sell bundles of ownership in stock market type auctions.

As the bank and home owner are sharing the risk, shared ownership reduces the need for re-insurance programs like Fannie Mae and Freddie Mac.

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