Given that The United States (and Canada for that matter), was founded on the principles of rhe supremacy of the law of God, and that charging interest of the poor is “usery” according to the Bible:
*Exodus 22:25
*Leviticus 25:35-37
*Psalm 15:5
It should come to pass that anyone who qualifies for a traditional home mortgage be offered a choice to have that mortgage underwritten directly by the Federal government at zero interest.
This should be limited to a single mortgage on a primary residence, - one’s home. It should not be offered to investment properties.
Moving, upgrading or down grading a home should be covered as long as the mortgagee lives in the home.
This would represent an enormous investment in the prosperity of the American people, at no cost to the government. Defaulting loans can be handled just as banks do now, the property can be resposessed and sold, the balance of the loan paid off and any remainder retained by the defaulting mortgagee.
With zero interest, government backed mortgages, “the people” will suddenly find themselves hundreds, even thousands of dollars better off every month. This money will be injected into the economy and benefit all.
The only ones to lose are the banks who are stealing our wealth.
You want the government to provide interest free “loans” so people can own homes.
Where does this free government money come from? It comes from TAXES collected by force of law. Why is it OK for the government to take MORE money from taxpayers and redistribute it to others? It’s NOT OK.
There is already a “mortgage interest deduction” in the tax code which benefits home ownership by reducing taxes. Many people think this is unfair to the taxpayers who don’t own a home. Free government money is never free and always ends up raising taxes for everyone.
Offering zero-interest government-backed mortgages sounds great on the surface, but it would almost definitely cause housing prices to skyrocket. If more people can suddenly afford houses, demand increases, and so do prices. That leaves us right back where we started, with homes becoming just as unaffordable, if not worse, for the average person.
Also, eliminating interest entirely removes an important part of financial responsibility. Without interest, borrowers wouldn’t feel as much pressure to stick to budgets or carefully assess what they can truly afford. Not to mention lenders being less diligent with qualification standards because the loan will be government backed. This could lead to more people overextending themselves and defaulting on their loans. When that happens, taxpayers would likely have to pick up the slack, which isn’t fair.
This idea reminds me a lot of what led to the 2008 market crash. Even though the circumstances aren’t exactly the same, it still boils down to making housing more accessible without enough safeguards in place. We all saw how bad that turned out, and I don’t think it’s a risk worth taking again.
While I get the point about wanting to reduce what banks profit from loans, I don’t think this is the right way to do it. The reality is, implementing this plan would hurt the overall housing market and potentially leave taxpayers with an even bigger mess to clean up. There have to be better solutions out there.
thanks fir the feedback. Where do you believe the money comes from now? What do you believe happens when a bank underwrites a mortgage?
I may be wrong, and may need to do some digging, but as I understand the current situation, “the money” is created out of thin air based on the mortgagee’s “promise to pay”.
I completely agree that “free money” doesn’t help anyone, but on the other side of the coin how does charging interest help anyone?
That doesn’t need to be a bad thing. If people don’t have to pay vast sums of “money for nothing” (yes I’m old and the tune came to mind ) to third party interlopers who do nothing to earn it they could afford the higher prices, and it becomes real equity as they pay it off. The money stays in the economy, not the pockets of “banksters”.
I am fascinated with this assertion. How does paying obscene amounts in interest make people more responsible?
The 2008 crash resulted in large scale defaulting because people could no longer afford their payments when the interest rates went up. All that volatility would become irrelevant as the payments would be based on repaying the capital and home owners would still be able to meet their obligations.
I am very keen to understand why you say this.
My mortgage on a 3 bedroom house on 1/3 acre has gone from $2300/month to $4500/month over just the last three years alone. Who is the beneficiary of that
$26,400 annually? It is the banks and it it pure theft. It contributes nothing to society when it could be spent on goods and services.
I am keen to understand better why you say it would hurt the housing market. Pre 2008 when there was low interest the housing market actually boomed. The crash and ensuing defaults were entirely due to interest rate changes.
With interest out of the equation the crash would never have happened because mortgagees could still afford their mortgages.
How is this no cost to the government (we the taxpayers)? How about the investment time of that money? If I were to loan a person a large sum for a period of 15-30 years, that’s investment returns that I could be missing out on. I expect my money in the bank to at least draw interest. Remember, since you are quoting the Old Testament, there is also the Parable of the Talents in the New Testament. Given that this parable in in red (spoken by Jesus), perhaps some interest is not bad. I realize that there is also a larger teaching to the parable, but I believe Jesus used a real world type example there also.
Interest is the cost of borrowing. Banks provide loans and the borrowers pay interest to cover the lender’s costs and profit. Would you give someone $500,000 on the promise you’ll be repaid? That money is no longer available to you. Unless you receive some compensation for giving up the use of that money, why would you loan it? Same goes to the banks.
) to third party interlopers who do nothing to earn it they could afford the higher prices, and it becomes real equity as they pay it off. The money stays in the economy, not the pockets of “banksters”.