Nomo Mortgages!
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We don't need mortgages any more. At one time, they were the only choice property owners had. However, with crypto currency, we can create an entirely new concept.With no interest, no downpayment, no monthly payments, and a loan that doesn't come due unless the property is sold. Sound impossible? Read on!
Almost everyone thinks they know what a mortgage is, just as I did, and I spent years in the real estate industry dealing with mortgages all the time. It's just a process, people go to the mortgage company, fill out oodles of forms, and eventually the mortgage company sends a check to the title company and we'd have a closing. The title company would write checks to everyone who had one coming, and then we'd all go for drinks and snacks. But do you know who the money for the mortgage comes from? Would it surprise you to know that it comes from YOU?92% of all mortgages in the US are bought by the government. Your mortgage was purchased before you even closed. The "mortgage company" is paid a small fee for their trouble, and also a small percentage to service the loan. So if you're a taxpayer, you provided the funds for the mortgage. Rather in advance. And other people were taxed to pay for your mortgage, etc.The Federal Reserve holds approximately $8 Trillion in mortgages and mortgage-backed securities. It changes from day to day, and exact numbers are hard to come by.
And look at the numbers...For the sake of discussion, let’s say you were to buy a home right now, on the usual mortgage terms.The purchase price is $250,000, and you put down $50,000, leaving $200,000 to be financed over 30 years, at an interest rate of 7.18%.
(We’ll skip points and stuff. Taxes and insurance not included!)Your principal amount would be $200,000. over the first 3 years of the loan, you would pay:
1354.87 per month, amounting to:$42,441.14 in interest$6334.17 in principal.Over time, you pay more in principal, but at the end of 30 years, you’d pay $487,753.08, of which $287,753.08 would be interest.If you don't pay, your home is foreclosed on. You don't get back anything you put in.What I propose to do is to create a crypto currency, stabletokens backed by real estate. The token amount would be equivalent to the sale price of the house, including closing and recording fees. The token issue would be recorded on the closing documents, and become a first lien on the property.Becoming part of the public record, the property could not be sold or transferred without the lien being paid, much like a traditional mortgage. However....The lien would not collect interest, because the tokens represent equity in the property. If you wanted to reduce the amount, you could whenever you wanted, by merely buying tokens---but you wouldn't have to.
There is an article I put on LinkedIn, called "A Fair Question". It's about the future of the US dollar. There is also a link to a video I made, very short and very much a fictional story, that I hope you'll find entertaining, called "About Mortgages".It's important to note that this system could not be implemented in the US at present, due to SEC regulations. However, it could be tested in Argentina, and several other countries where it would currently be legal.If you're interested in discussing it further, you can contact me on LinkedIn or Twitter, @MongoHampshire.Thank you for reading!
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