Forum Post: Lengthy 40, 50, 75 and 100 year mortgages could serve as temporary measure to shore up economy, prevent homelessness for children, keep communities in tact and once mortgage holder earns more money...they can pay mortgage off QUICKER.
Posted 13 years ago on Nov. 10, 2011, 12:49 p.m. EST by FedWallFedWellFedUP
(183)
This content is user submitted and not an official statement
Lengthy 40, 50, 75 and 100 year mortgages could serve as temporary measure to shore up economy, keep families in their homes, prevent homelessness for children, keep communities in tact and once mortgage holder begins earning more money...nothing should prevent them from paying mortgage off QUICKER.
Fantastic idea! I'll take a 10,000-year mortgage, please!
But as a lesson learned from the last bubble - Read your Mortgage, watch out for that ballon payment after 5000 years.
lol
We need more real-life solutions!
don't look to techflunkie for solutions. he's not interested in any. he thinks things are just fine and that the problem has been and is caused by the victims of corporate power. not the actions of unregulated business. he's got the cart before the horse.
!!!!!
Or rent. A 100 year mortgage means neither you nor your children can accumulate the wealth with that property anyway and you are still at risk of losing the home if you miss payments. You may as well be renting.
There is no shame in renting until you can afford a house! It used to be the norm before government rules (written with the help of banks) removed the risk of bad loans. It used to require 20-30% down payment to get a home. Then the government removed the banks' risk and we got zero down loans and subprime ARMs . . .
Also, most people take out more or new debt when they have higher incomes (and thus more borrowing power) than they pay early on existing debt like a mortgage. At best you are suggesting we push our problems down the road with this stupid idea . . . more than that, though, you are leaving the value of the home even more fully in the banks' hands.
Truly. On a 30-year, 100% mortgage you own like 10% of your house after the first 15 years of paying. The bank owns the other 90%. On a 100-year loan, you own nothing! That system just enriches the bank. You may as well have rented.
The goal would be to pay off quicker by making extra payments once economy recovers -- or sell --- we need solutions for today
Rents are going up at a dramatic rate too!
Never works.
Not if you live in a place where housing prices are as stagnant as wages. Where I live, you can buy a nice first home for $60,000. It's not Portland or Madison or Austin, but it's affordable and you can definitely pay off a 30 year mortgage in half the time, even on two $20,000 a year salaries.
There's nothing like owning a home and having that fixed rate mortgage. I'd rather live in Detroit and own a home than live in San Francisco and have to rent for the rest of my life.
yes and interest is tax deductible
pa the house off and give the money to the church. pay $10000 in interest to save 3500 in taxes (give the bank 10000 to keep from paying the govt 3500). same thing happens when you give to the church only the church does good things with the money.
I'd give that up in a heartbeat if it meant closing all loopholes.
You own the equity. Buying at today's prices is a steal. Obama and the Democrats won't be around forever, the economy will come back once the instability of this administration is in the rear view mirror.
the problem is that mortgages are just bank money making schemes. You usually pay double what your home is worth at the end of 30 years. If you pay 1400 a month to the bank, 1200 of that is fees and interest. it's not until nearly 20 years that you start to pay down a significant portion of what the house actually costs. Banks get their money first and don't care about the homeowner. if you get sick, laid off, etc and can't pay, you lose your home. the bank has gotten their interest money and just don't care. Banks should be not for profit.
agreed. in fact, I wonder why anything should be for profit. but, to be "reasonable", there should be things that are never for profit or privatized: health care, energy, utilities, infrastructure, social services, government agencies (government is for the people, not for profit), day care, elderly care, hospitals, education, schools, universities, sports arenas and gyms. not that we have any of that to show for all the taxes we pay. any business should, by law, provide 5 weeks paid vacation a year, 40 hour work weeks, weekends off, double pay for working holidays, time and a half for other holiday days. they should provide free day care. paid maternity/paternity leave, one week paid sick days, half pay days after that. Americans have either lost most of these or never had them. Also, public transportation as in trams, light rail, fast trains, buses, etc, should be a high priority everywhere. having a car makes you a slave and its expensive. we are so far away from this that we are on the opposite end of things: we are slaves, human "resources" to be used and abused. also, we need many more free libraries and community centers (not for profit and not privitized) in short, we need to see OUR tax money going to US not corporate profit which made up 88% of real revenue last year, while only 1% went to salaries and wages. and, I bet no one saw anything for their tax money
cheers!
and, if businesses can't "afford" to do the things I mentioned above, then two things: 1. they should be allowed to fail or to never exist, 2. our tax money should assist them in accomplishing those things. after all, businesses should exist for the people, not for profit. they should exist to make our society and our economy better, not worse. key words, "society" and "economy" when did "people" get excluded from the definition of these words?
This is an emergency measure to prevent more foreclosures and homelessness
Geez
Let's ask Congressmen, Representatives and all who will listen to turn this mess around today!
This idea can begin on Monday!
Nothing has been done to help the real estate market or the economy
Governments should back these lengthy mortgage programs
MERS (Mortgage Electronic Registration Systems, Inc.) has done a terrible job at tracking mortgage ownership. Because hundreds of sub-prime mortgages where bundled in sub-prime products, it makes knowing who the actual owner of the mortgage almost impossible. These two facts could be used as a leveraging tool for homeowners facing eviction/foreclosure. If the bank cannot prove ownership of the mortgage, they cannot foreclose, evict or demand payment. Why don't we have an Occupy Mortgages where volunteer homeowners facing foreclosure/eviction invite protesters with legal and financial knowledge to occupy their home? The local occupy movement could also provide help. And, in the event that the family is forced to vacate, perhaps some local occupy folks could invite them to occupy their homes. Or, perhaps the local occupy movement would come up with their own solution.
Excellent idea...please post this idea on this site and any appropriate site you can find
I have and will continue.
People use proposals like this one to make fun of this movement.
ah, its techflunkie again. aren't you tired of being a conservative, corporate butt slave yet? its seems you are in every thread of every post on OWS. why don't you go to the tea party site. they'll listen to your nonsense there. the current system is broken. corporations control our government and our economy. we will not change things by voting. what do you suggest? do nothing?
You're just upset because I questioned your sense of ethics after you went to great lengths to rationalize a justification for borrowing money and then skipping out on the debt without paying it.
I did? really? oh, so sorry. now, lets talk about the banks and corporations shall we? obviously, you are not up to that task. how deep is that corporate cock up your ass?
Why do you care if your mortgage is 15 or 100 years? If your plan is to not pay your debts anyway then it doesn't matter. I have to admit that your idea is a lot simpler than the one in this thread. Instead of trying to get somebody to loan you money that you won't have to pay back until after you're dead -- just don't ever pay it back. Much simpler. Kudos for keeping it simple, at least...
We need solutions for every criticism made --- so offer up some solutions too and don't worry about whose making fun of you --- we are not on the playground
I did, it was shot down.
http://occupywallst.org/forum/vote-or-else-this-will-all-be-a-pointless-exercise/
then the resources already exist to do so with or without the loan
Real-estate needs to be revalued. It has been artificially inflated for decades. We could start with the properties that have been foreclosed. You know the ones that were paid off in the Bank Bail-out? The ones the banks got paid for with THE PEOPLES money and returned to their possession so that they could be resold.
Activism works. So lets get active 99%. Take heart in Ohio's recent victory.
Create sign and send petitions. The more inputs we have the better. http://occupywallst.org/forum/create-sign-and-send-petitions/
A site to submit issues have them collected, collated and submitted. www.lobbydemocracy.com
Contact the White house: http://www.whitehouse.gov/contact
Contact the senate: http://www.senate.gov/general/contact_information/senators_cfm.cfm
Contact Congress: http://www.contactingthecongress.org/
Contact the house of representatives: http://www.house.gov/htbin/findrep?ZIP=55433
Contact the Supreme Court: http://www.supremecourt.gov/
OUR BANNER/OUR CAUSE
When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation. We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. --That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. July 4, 1776
100 year mortgages are used in Japan to create intergenerational land-home ownership
You would pay so much for it though. think of how much interest you would gain over 100 years
The goal would be to pay off quicker by making extra payments once economy recovers -- or sell --- we need solutions for today
[Deleted]
Why do people slam lending institutions for foreclosing or repoing something when the borrower FAILS to make their payments? That's what you signed up for. If you can't handle buying something on time, don't! Save then buy it. Save yourself the interest. Live within you means, but don't default and cry foul about the banks. Sheesh.
this is the case for many situations. However, if you have a 30 year mortgage. and something happens to you at year 20 like say, cancer and you need a little time to catch up on bills - that should not give the bank the right to take your home after being a great customer for 20 years.
yes it should. you signed a contract. in good faith they gave you the money.
yes, but that doesn't make the contract fair.
then you should not have signed the contract
I don't own property because i won't sign the contract. But that doesn't make it right for others to profit off of another's misery
paid cash for my stuff = no contract. paid cash for my cars, paid cash for my house. if you don't like the terms of the contract, don't sign it. they are not making profit off of misery. they are making profit off of money that they loaned someone in good faith.
the bank does not actually make any money until they get what they loaned back. if i loan you $100 and require you to pay me back $110. I don't actually make any money until the original $100 is back in my pocket. The "balance sheets" show that i have made a profit, but if you only pay me back $90, file bankruptcy/stop paying, i still lose min. $20.
that's not how it works at all. Let's say your mortgage payment is $1400 a month. when you first start paying the mortgage, your first payment is 1200 in fees and interest and 200 to the principal. The next month its 1190 to fees and interest and 210 to principal. And so on. The bank gets their fees first.
that is how it works on paper. if you loan me $100 and i make 2 payments then default, did you make any money? no. If i file bankrupt, you still don't get money. you still did not make a profit.
yes, but going back to my original point. After 20 years, the bank has more than made their money in interest. A family goes through a crisis, say a job loss, cancer, etc. After being a great customer for 20 years, and having one bad year, the bank forecloses. And that is just not right. It's sad.
good discussion. you are right. the bank should be willing to work with the people that bought the house. because after 20 years, the house will more than likely sell for more than what is owed and the bank will have to give that money back to the people they forclosed on.
but it is right. It is sad, yes.
It's a business contract. You would expect them to uphold their end of it. Why shouldn't they expect you to hold up yours. They can't possibly be the ones ultimately responsible for how everyone else's lives are running. It's not like they snatch them up after a missed payment or two. It's generally months before a foreclosure happens.
I understand that. But people aren't businesses. In order to be a more civilized society, we should understand compassion. The reason people usually lose their homes after they become ill is because health care costs are through the roof. It's a circular situation that needs to end.
Buying anything over time is a risk. It's a risk you take because it's typically an item you can't afford outright. No one is MAKING anyone live like that. If you don't WANT to take that risk then rent. No one is entitled to provide people all of their wants and this is just that. A want, not a need.
I can understand that personally. I don't own property because I personally don't want to deal with something for that long. BUT I don't think that we should be judging other people who have had a hard time. It's a civilized society that offers compassion. Not financial rape.
Again, it's purely voluntary on the part of the borrower. Compassion is for charitable organizations. A bank is not that and shouldn't be expected to be. That's an unreasonable request. No one owes someone else a house. Not 90% of it, not 5% of it. I do buy things on time. I realize the risk and am willing to take it even knowing what it means if I somehow fail. No one else in this world should hold that responsibility other than myself.
yes but it is irresponsible of the banks to charge so much interest that the owner can never truly catch up. That's just greed at it's best.
The banks go off of the interest rate set by the government, with very little added. Home mortgages typically have low interest rates. Every point you've tried to make holds zero water. Are you knowledgable first hand about any of these things or are you just repeating rhetoric you heard at a rally or something? The banks have costs too. Computers, people, etc. It takes money to do these things, and the customer is the one "buying" the loan. No loans aren't free, and they shouldn't be. Someone could be making other interest on that money if they weren't loaning it out.
No, I do know about it first hand because I worked for a bank. I was an office manager. That bank was dealing in sub prime mortgage loans. The government did nothing to stop it until it was too late. The company got bought out and I and several others lost their jobs. I was lucky to find work in a different field. But others in the same situation have not been so lucky. I don't repeat what I hear. Only what I see and experience. Loans shouldn't be free. I am not against interest. I am merely stating that a lot of that money doesn't just go to hiring employees or paying for computers and office supplies. Executives have bank accounts used for liquid lunches and expensive conferences. That kind of excess is ridiculous.
Banks "invest" money in people through loans. Just like with any investment you expect a return. Riskier venture gain higher rewards. Sub prime loans are one of those risky ventures. I am glad you brought them up specifically though, since before now we were basically talking about all loans. Too many topics here try to be all inclusive when they are really about a specific subset. Anyway, the banks are making riskier investments with the sub prime loans, so should get more interest from it. If the were making riskier investment in the market, they would expect the same thing. But again it all boils down to...... No one forced these people to get these loans, buy houses they couldn't afford then default. If individual banks or personnel weren't properly informing the customers they should be reprimanded. However, the loanees were given Everything in writing. If they couldnt understand it they should have taken it to someone that could explain it to them. Their shortsightedness should not be some other taxpayers problem.
we need solutions for the mess today!
Again though, the banks take all the interest up front. The principal takes forever to pay down. that is the problem. There is a difference between operating costs and profits. If the banks weren't in such a rush to make a profit, then the people would be able to pay the loans off faster. I understand the business and contracts. But that doesn't make them right.
That's actually not a bad idea for this period in time. Housing is depressed to levels that make a long term loan feasible. Everything the government is doing is inflationary so committing today's dollars to be repaid at tomorrows cheaper dollars is actually fiscally sound.
This same thing has been proposed for government bonds as a means to shine disaster on down the road even further but the crushing future debt even makes Democrats nervous.
It won't work for government but it could really be a solution to soaking up the excess and undervalued housing and create some stability.
Thanks for your vote of confidence on this issue...I like the idea of limiting the lengthy mortgage opportunity...thereby creating more demand.
If you're young you should be shopping for homes right now. As many as you can pyramid... try to get homes that will need NO maintenance and manage them closely to keep out the freeloaders. And go for long term equity.
if you are young, don't listen to this idiot. betuamolar, how is a young person going to GET a mortgage loan? so, instead of being heavy under a student loan debt, you want them to go get buried in mortgage loan debt. foreclosures are up, home values plummeting. the old days of investing for 10 or 20 years in a property for long term equity are over. nothing is for sure, especially the housing market. and renting them out or selling them would be impossible in some places. how would they make the mortgage payments, even for the first year, if they can't rent them out? are you assuming these make believe young people are rich? or can free load (as you put it) off their rich parents? hey, daddy, I need a couple of million. no problem son,... hmmmm.... lets see, which pants do I have my spare change in?... you're an idiot...
Listen. At 18, I was struggling to pay rent and sleeping on a futon because I couldn't afford a bed. Some months later, my first bed came from a church sale. I paid fifteen bucks for it. I doubt I'll ever finish night school. Because I've always been too busy working to pay the rent, gather some groceries, and put gas in the car. Simple formula: no gas, no work, no money. But you know something? I never once so much for a single minute ever felt sorry for myself. You wanna know why? Because in world of opportunity, with a mind of possibilities, being poor can be a beautiful thing.
I've been around a little. Some might think I've been to hell and back. But I've never been defeated and I never will be.
Now is the time to buy. And anybody can do it.
who is feeling sorry for themselves except you? hell is my home.you've only taken a little tour. and there are many millions of people that have died and are dying because of the system you embrace. should I cry for you? or maybe, you should feel some compassion for the people around you.
Tulcak from praque... are you kidding me? I have no compassion for anyone one who is not willing stand on their own two feet. You want to know why? Because I know human beings are capable.
you have no compassion
In my part of the world there are 1br condos going for 12-16k right now, these will be 40-50k condos in a few years and rental property is in demand. If I were 30 years younger I would be all over it, I'd be the condo king for sure.
I realize everyone hates money here but property investment right now is a no brainer.
I don't believe it will happen in a few years. If I did I'd be buying... I think we're talking a long term investment here. But yea, now is the time to buy.
You ignoramuses still don;t understand economics do you. You Think a home builder wants to accept payments...for 100 years! Before they get there money back?
This is an emergency support measure for the economy -- the high strung need not comment
I'm not for this but, uhhhhmmm, the builder usually isn't the one floating the note. A lending institution is. The builder gets paid in full when it initially sells.
Yes..But the BANK won't give anyone money, if the builder says..."don't worry...you should get your money..in about 100 years... give or take a decade or two."
???? I don't have problems getting loans and I'm not a 1%.