Evan McKenzie on the rise of private urban governance and the law of homeowner and condominium associations. Visit evanmckenzie.wikispaces.com for my published articles and services.
Perhaps the Milton Friedman Choir can perform a song explaining the virtues of privatizing our mortgage finance system?(via Reason)
Not about privatizing the mortgage system, but "The American" ("The Journal of the American Enterprise Institute"), has an interesting article about "Canada’s Marvelous Mortgage and Banking System" (February 26, 2010, via a reader comment from "Live Like A Canadian!" by Mickey Kaus)After observing that Canada did not suffer the housing collapse and mortgage delinquencies that the United States did, Mark Perry writes:In the 1930s, when 9,000 U.S. banks failed during the Great Depression, not a single bank in Canada failed. When almost 3,000 American banks failed during the Savings and Loan (S&L) Crisis, only two small Canadian banks failed in 1985, and those were the first bank failures in Canada since 1923. And while almost 200 U.S. banks have failed since the start of the global recession in early 2008, Canada remains the only industrialized country in the world that has survived the last two years of financial and economic stress without a single bank failure.Among some differences in the U.S. and Canadian mortgage system explained in the article are:1. Full Recourse Mortgages in Canada. 2. Shorter-Term Fixed Rates in Canada. 3. Mortgage Insurance Is More Common in Canada than in the United States. 4. No Tax Deductibility of Mortgage Interest in Canada.5. Higher Prepayment Penalties in Canada.6. Public Policy Differences for Low-Income Housing.7. Differences in Canada’s Bank Concentration and Greater Diversification.Taken together, the features and regulations of banks in Canada outlined above create a healthy and sound “pro-lender” environment absent of political motivations for outcomes like greater homeownership, compared to the often politically motivated “pro-borrower” and “pro-homeowner” policies of the United States. Although Canada has long been criticized by conservatives and libertarians as a quasi-socialist state, look for them to increasingly praise Canada as a shining example for the U.S. to emulate.
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