Sunday, April 18, 2004

The Good....and the Bad and Ugly

Habitat for Humanity works on such a sensible premise. Volunteers build houses with materials obtained at cost and paid for by donations. The families who ultimately live in the houses pay for them via a no-interest mortgages. (They also put in many hours helping to build their own and other people's homes.) The money from each payment benefits no one. Instead, the cash fuels other building projects, with the goal of eliminating sub-standard housing.

That stands in stark contrast to a new idea to solve the social security crisis. The elderly may now get something called a reverse mortgage, which is something like an open-ended home equity loan. Home owners trade away proportions of ownership in the houses they've paid off in exchange for the cash they need to buy their heart and chemo drugs. Then, when they die, they can leave whatever home ownership percentage they have left to their children, who, at that point, usually opt to sell or refinance their parents' homestead.

Naturally, there are fees associated with each stage of the reverse mortgage and refinancing. Which means that the banks and government have made a tidy profit on the home sale, on a lifetime of monthly payments, and then on the establishment of the reverse mortgage. Should the reverse mortgagee's heirs choose to keep the house, the banks benefit again from the refinancing fees... and from the interest collected on another lifetime of monthly payments. Granted, they do this all the time in regular house sales between un-related persons, but the difference is that this house was already paid off once... and a social security debt just morphed into a (more palatable?) mortgage debt.

We need to do better than this. Who will be brave enough to try again for national health insurance? Who's going to lead the people in this country to start thinking of themselves as something other than consumers? We need a quiet (nonviolent) revolution to change a country dominated by turtle-in-its-shell, turtle-on-its-back, turtle-too-greedy-or-too-chicken-to-rock-the-boat PASSIVE-ISTS.


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