Binary Mortgage

Leave it to our government to take a difficult situation and come up with a solution that creates more pain and suffering than the problem created on its own.

Mortgages For Folks With No Money

Oddly enough, when the idea was hatched in the minds of some politically correct politicians, this idea did not sound completely ridiculous to them as it should have. Now we have millions of homeowners who will lose their home because of those supposedly well-intentioned public servants.

But let’s forget about those folks that decided to take on real estate roulette with vacation and rental properties. To them, this is just an education in free market forces. Let’s just consider the family who has been occupying their home, maintaining their home, and building a family in their home. Our government’s screw-up has now decimated the value of their homes to the point that they no longer have any equity in it.

InAmerica has carved out an idea that will not fix the national problem. The only thing that can fix that, is for government to get out of the way so our economic engine can do what it does best. What we’re now talking about is a short-term solution to keep that family in its home until the economy can make it possible to live in a home without the constant fear of being put out on the street.

Splitting The Mortgage

If we consider the majority of families still occupying homes, the odds are that the majority of them will keep working and paying their mortgage just so their home is safe. InAmerica’s Binary Mortgage brings in real estate investors who will purchase individual mortgage loans from a big bank, that in the aftermath of their feeding frenzy, will require a homeowner to put down 30% in cash. These investors (once a homeowner agrees to honor the commitment) will purchase the delinquent loan from the bank. Then, they will split the mortgage into two separate mortgages. The first mortgage will now be for the amount it is appraised for, and the second loan will be for the balance.

The first loan will be for a lightly higher interest rate, but the second loan will only accrue at 1% interest and not require any payments until the homeowner decides to sell the property or add the second back into the first because the real estate values have returned.

What happens when you do this? The monthly payment goes down significantly, and the homeowner is no longer in default. The binary mortgage is designed so that when things get better, the homeowner will go back to the market and get a better loan with better rates.

When Can We Do This?

We’ve already had people call us interested in this. We can’t blame them. But, unlike the government, InAmerica would like to study its binary mortgage a bit longer to ensure that there are no unintended consequences. It seems to work well for both the investors and the homeowners. Please be patient.

Once we are confident there are no unintended consequences, we’ll start waving our flag so you can see if the Binary Mortgage is best for you.