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Preventing Mortgages From Going Underwater





One weakness of the standard mortgage in the US, discussed last week, is the extreme rigidity of the payment obligation, which makes it very difficult to manage the repayment process efficiently. In last week’s article, I suggested that this problem could be fixed best by defining the borrower’s contractual obligation in terms of a maximum loan balance that would decline month by month, rather than a minimum payment. The second weakness, discussed below, is that the borrower must assume a risk that her equity in the property will decline due to circumstances beyond her control. This happened to most homeowners read more >>>

Source:: HuffingtonPost.Com

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