I think this idea is dead on arrival..there's a huge mismatch between the appetite for the every day person to invest in illiquid assets (like mortgage loans se

I think this idea is dead on arrival..there's a huge mismatch between the appetite for the every day person to invest in illiquid assets (like mortgage loans secured over 25-40 years) and the market demand for such loans. I suspect without banks taking on the liquidity risk there wouldn't be support to fund the demand for mortgages. This has also already been tried post-20088 with the huge boom in so-called P2P lending The same is true for interest rate risk. Generally people won't lock away cash for 5 years for a 1%/yr better yield over instant access. Banks can manage this by taking out interest rate swaps.