While many stoutly aver their antipathy to sharing anything, the facts speak to the contrary. While it is true that at the outset, the desire to own property privately must result in an exclusive relationship in which the whole world is excluded from the property owned, there is a countervailing desire which exists in us all. Having acquired a property which is valuable to us, we wish to share it with others so we may win their admiration in respect to what we have acquired. This is the drive that moves us toward becoming businessmen or hosts.

The Rise and Fall of the Home-Ownership Myth

Douglas E. French

Ludwig

von Mises

Institute

AUBURN, ALABAMA

Copyright © 2010 by the Ludwig von Mises Institute

Published under the Creative Commons Attribution License 3.0.

http://creativecommons.org/licenses/by/3.0/

Ludwig von Mises Institute

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ISBN: 978-1-61016-102-2

The idea that “a man’s house is his castle” is attributed to American Revolutionary James Otis from 1761, and his idea was that government should never be permitted to breach its walls. It is a good thought, in context; one that sums up a dogged attachment to the right of private property.

CHAPTER

ONE

What is Strategic Default?

Strategic default is when homeowners stop paying on their mortgages when, in fact, they can afford to make payments, but choose not to because the house that serves as collateral for the loan is worth considerably less than the loan balance.

CHAPTER

TWO

Double Standard

According to work done by professor White at the University of Arizona’s James E. Rogers College of Law, underwater homeowners aren’t walking away because they wish “to avoid the shame or guilt associated with foreclosure,” and “fear over the perceived consequences of foreclosure—consequences that are in actuality much less severe than most homeowners have been led to believe.”

CHAPTER

THREE

Just Who is The Lender?

It seems to be a lousy bet on both sides: neither possesses a crystal ball that will remain clear for 30 years. In a free market, libertarian world would lenders make such a deal, or borrowers for that matter?

CHAPTER

FOUR

The Government Gets Behind Home Ownership

In an America that was arguably much freer and much more libertarian there was no such thing as a 30-year mortgage. In the late 1800’s credit for home ownership was not readily available. “Much of the lending that did occur was done by land subdividers, builders, brokers, local investors, or friends and relatives of purchasers,” Columbia University’s Marc Weiss explains in “Marketing and Financing Home Ownership: Mortgage Lending and Public Policy in the United States, 1918–1989.”