Though examining the past may seem pointless for many people, truth is that knowing the past can help us understand the present and foresee the future. That is what history is all about.
And this is a brief history of home mortgage loans in America where we do not pretend to depict the exact steps that this financial product went through all along the history of finances but the few main high spots that turned these loans into what we see today.click here for more info
Before Federal Lending Institutions Appeared
At the beginning, there where not institutionalized lenders providing home mortgage or promoting the issuing of mortgage loans by private parties as there are today. Instead there where only private lenders that personally lent the money to those who needed it but the terms of the financial transaction were not fair, at least not on today’s perspective. Moreover, many of the practices that where very common those days, would be considered predatory lending today.
For instance, what today is a special loan type targeted to very specific borrowers with special needs, back then was the rule: the balloon payment. At the end of the repayment program (and repayment schedules would not last 30 years, not even 15!), the borrower had to put down a significant amount of money which was a big part of the loan principal. Therefore, though there where installment loans back then, these where not small installments and particularly the last one was not small at all.