We Need More Flexible Home Mortgages
Today's loans 'designed for yesterday's borrowers'
By John Johnson,  Newser Staff
Posted Aug 12, 2010 12:46 PM CDT
A foreclosed home in Denver.   (AP Photo/David Zalubowski, file)

(Newser) – In an op-ed headlined "The 30-Year Prison," Katherine Stone lays out what she sees as a big problem contributing to the housing crisis: "Today's mortgages are designed for yesterday's borrowers." Long gone are the days when people had the same stable job for life, and it's time for the 30-year mortgage as we know it to go away, too.

"Any effort to recover from the crisis must include more flexible mortgages that take today’s employment landscape, with its frequent job-hopping and episodic unemployment, into account," the UCLA law professor writes in the New York Times. She offers two examples: Mortgages that convert to interest-only loans if homeowners lose their job, and the creation of a "career transition bank," to which people could make pre-tax contributions while working and then withdraw from when unemployed. Click the link for details.