Comments on: Home Equity: Not Loans, We’re Talking Shareholders

By: big buddha cheese

big buddha cheese — Thu, 22 Sep 2011 01:35:00 +0000

Essentially what I need help understanding are the steps I need to take. Who do I talk to? Do I need a property lawyer? I am happy to walk away from the property, removing myself from the loan and property title so that my ex partner can have full ownership. I understand this means he must apply to refinance the loan? And this can only happen if I sell my 50% to him, removing me from the title?

By: conveyancing birmingham

conveyancing birmingham — Wed, 31 Aug 2011 09:31:00 +0000

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By: home loan down payment

home loan down payment — Tue, 28 Jun 2011 06:12:00 +0000

Home owners acquire equity in their home from two sources. They purchase equity with their down payment, and the principal portion of any payments they make against their mortgage. They also benefit from a gain in equity when the value of the property increases. Investors typically look to purchase properties that will grow in value, causing the equity in the property to increase, thus providing a return on their investment when the property is sold.

By: More Money Friday roundup: Spirit CEO speaks & Fannie execs surprised | Manageabuck.com

Tue, 13 Apr 2010 17:00:32 +0000

[...] blogger makes an interesting argument that consumers and banks should forget about mortgages and try joint equity transactions to finance home purchases. [...]

By: the weakonomist

the weakonomist — Sun, 11 Apr 2010 13:51:20 +0000

Good thinking sgersten. For a bank to get cash flow they’d require the home buyer to make regular payments to buy back the equity. If you make regular payments, then the bank gets all their money back plus capital gains at no risk. Whether banks want to be in real estate or not, between foreclosures and holdings MBSs on their books, they are. I like the idea of this working in the absence of the GSEs. I hadn’t thought of that.

By: sgersten

sgersten — Sat, 10 Apr 2010 22:19:53 +0000

This doesn’t make sense for a bank. I don’t think banks are in the property owning business. They want to take cash in at a low rate, lend it out at a high rate and then get it back slowly… making profits on the spread btn the two rates.

It costs the bank $ to make that 95K investment either from paying interest on deposits or borrowing it from somewhere. Where does this program get cash flows to the bank to pay that cost?

However suppose there never was a Fannie Mae and the government wanted to support home ownership. Your program sounds like a better solution then insuring mortgages which seems like a very inefficient and risky use of tax dollars.