3 ms·

If banks are obsoleted, then how are mortgages supposed to work?

by im3w1l 6y ago

imhoguy 6y ago
Loans are mostly money printed by central banks and sold via consumer banks. Likely e-mortgage would be provided by central bank directly.
- im3w1l 6y ago
  Won't it lead to less accurate pricing of loans if there is only one central actor using rigid rules (needed to appear fair)?
  - literallycancer 6y ago
    The central actor can use the exact same rules that they currently make the lenders use.
  - jeofken 6y ago
    Fiat currency already means the supply side of capital is detached from anything in reality. Remember price is where supply and demand meet, and interest rate is the price of capital. Central planning of the currency market, just like DDR had central planning of the car market with the Trabant. With central banking, the supply can be infinite, and that’s what we Swedes are seeing with NEGATIVE interest rates. Jyske Bank in DK borrows to consumers house loans where you are paid to borrow. It can not end well, please someone show me logically/from first principle how it ever can.
NoOneNew 6y ago
As much as I hate banks in general, you are hitting the nail on the head. Low interest mortgages and credit in general start to fly out the window. The huge stock piles of cash they have help mitigate their risks effectively. Lower volume of loans also means a whole lot of financial vehicles people invest in for their retirement, are going to wash up as well. Right now, I dont see a viable replacement outside of private lenders like pay cheque loan and car title loans. Huge interest rates and really predatory capital requirements. Sub 20% interest rates, like it or not, come from all the things digi coins want to get rid of.
octocop 6y ago
Peer 2 peer loans are a thing.
jeofken 6y ago
The Swedish central bank could simply pay you 0.2% of your house price per year by printing more money. Just don’t let the Stockholm/Göteborg housing prices fall... Weimar all over again.

If banks are obsoleted, then how are mortgages supposed to work?

by im3w1l 6y ago

If banks are obsoleted, then how are mortgages supposed to work?

Loans are mostly money printed by central banks and sold via consumer banks. Likely e-mortgage would be provided by central bank directly.

im3w1l 6y ago
Won't it lead to less accurate pricing of loans if there is only one central actor using rigid rules (needed to appear fair)?
- literallycancer 6y ago
  The central actor can use the exact same rules that they currently make the lenders use.
- jeofken 6y ago
  Fiat currency already means the supply side of capital is detached from anything in reality. Remember price is where supply and demand meet, and interest rate is the price of capital. Central planning of the currency market, just like DDR had central planning of the car market with the Trabant. With central banking, the supply can be infinite, and that’s what we Swedes are seeing with NEGATIVE interest rates. Jyske Bank in DK borrows to consumers house loans where you are paid to borrow. It can not end well, please someone show me logically/from first principle how it ever can.

NoOneNew 6y ago

As much as I hate banks in general, you are hitting the nail on the head. Low interest mortgages and credit in general start to fly out the window. The huge stock piles of cash they have help mitigate their risks effectively. Lower volume of loans also means a whole lot of financial vehicles people invest in for their retirement, are going to wash up as well. Right now, I dont see a viable replacement outside of private lenders like pay cheque loan and car title loans. Huge interest rates and really predatory capital requirements. Sub 20% interest rates, like it or not, come from all the things digi coins want to get rid of.

octocop 6y ago

Peer 2 peer loans are a thing.

jeofken 6y ago

The Swedish central bank could simply pay you 0.2% of your house price per year by printing more money. Just don’t let the Stockholm/Göteborg housing prices fall... Weimar all over again.