What da Mortgage?
By Kevin Bloom - November 07, 2023

Would you buy a house if you could get a mortgage with no interest?

How about one with no monthly payments, that never had to be paid off?

And what if it had no down payment?

We’re all kind of used to thinking of a mortgage as something that costs a lot of money, and that’s true.

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, your life savings, leaving $200,000 to be financed over 30 years, at an interest rate of 7.18%. (We’ll skip points and stuff.)

Your principal amount would be $200,000. over the first 3 years of the loan, you would pay:

  • $42,441.14 in interest
  • $6334.17 in principal. Ouch.

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.

Do you know where the money came from for that loan? Sorry to tell you this, but as a US taxpayer, it probably came from YOU! Yes, the US government owns just under 93% of all the home mortgage loans. (This was news to me.) Of course, the government doesn’t have any of its own money, only what it takes from the people. So the money for your house was stolen from you, and then loaned back to you. What a racket, huh?

In other words, you’re not morally obligated to give Uncle Joe $287,753.08.

You might be saying to yourself, “well, that’s just how it is”, which is true, but it doesn’t have to be!

Thanks to the Age of Crypto and associated tech, you could have tokens created to pay for the equity in your new house.

I’ll bet those tokens would be used for DeFi in a flash, as another cryptonaut suggested.

Of course you’ll still get stuck with property taxes, and of course you’ll have to insure the house, but you would with any other mortgage too.

Could this be accomplished under current US securities law? Probably not, although there is some precedent for mortgages not to be considered securities. (See Reves v. Ernst & Young)

Disclaimer: I’m not an attorney. I don’t give legal advice. I have discussed this issue with many attorneys in many states, and they agree that the SEC will do whatever they want, and just because something really isn’t a security doesn’t mean you won’t be prosecuted. So be careful out there!

Crypto must be freed from the current regime. It will be hard, but it’s worth it. In the meantime, we’ll just have to work from countries where it’s legal.

I like Javier Milei, what do you think?

Kevin Bloom is a former real estate broker, brewer, and advocate. He also once founded a lobbying firm called Rothbard, Stirner, and Dobbs. Currently he’s involved in a venture involving offshore property finance, on behalf of  Flamingo Coastal Properties LLC, a Cook Islands company, where crypto is fun AND legal. Please contact him there, if you like. He is not selling any crypto currency at the moment, because reasons. He likes Mendoza and Buenos Aires.

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