New Mortgage Design Would Minimize Home Foreclosures

http://www.sciencedaily.com/releases...0119141719.htm

Looks like a good idea. What we need first and foremost is stability.

To that end last year I forwarded another idea to one of my countries political parties. It involves introducing a sale-and-rent-back right on behalf of the owner of the house. That way, the risk of foreclosure is much reduce.
Of course, the actual plan is a lot more refined, is written for the Dutch market, and has additional bells and whistles to serve the interests of all parties involved equally.

The proposal seems like a good idea, in that it would eliminate the temptation for people to "walk away" from being unable to sell.

I think that the current structure has outlived it's usefulness to society. Globalization and job instability makes it very difficult for people, who try to do everything "right." People often need to move to find new work. Much more frequently today, and a thirty year mortgage is just "unreasonable" when it takes five years to recoup, and pay the inherent expenses when selling.

I've toyed with the notion of "portable equity" where the lender still owns the house, unless one can completely pay cash for it. Something that provides an opt out where a person can move experiencing a job loss where they are not at fault. Or a catastrophic health issue. Maybe paying into "portable equity" insurance funds vs. PMI.

Who knows, but I've always thought that giving a bank the ability to charge 250 percent of the value of a house in cummulative interest payments, is nothing short of stealing and a huge drag on any economy.