# Hot Blava

The national debate will always seep over into local politics and thus, events on the national stage will find their way into Hot Blava. We hope that Hot Blava will be an interesting mixture of national issues and issues that affect Utah, and particularly Utah County where we live. Mostly, it is great to write about issues you're thinking about as it solidifies your thinking... or exposes your own irrationality. You can decide which is which.

## Monday, December 12, 2005

### Mortgaged Renters

There is a new class of people in the United States. They are people I will call "Mortgaged Renters" for lack of a better term. These are the people with interest-only home loans or negative amortization loans. A generation ago, I suspect that such lending practices would have been unthinkable or at least very uncommonly available to individuals. But in reading a piece at Slate, I realize how brilliant this system is for lenders. The mortgage lenders are essentially the homeowners and the person who pretends to be the homeowner is really just a renter.
How does this play out? Well, the "mortgaged renter" does get something a conventional renter doesn't: equity. In the current housing market, that can be a considerable upside. I suspect the downside is greater. The mortgaged renter must act like a homeowner. They can't call the landlord when the dishwasher goes on the fritz. They have to pay the property tax and homeowners insurance.
Is it ethical for a mortgage lender to become a landlord without accepting the responsibilities of the landlord? I suppose the answer changes depending how the equity vs. responsibility calculation comes out.
If you've spotted other writing on this topic (which I'm sure is not a unique discovery to me) I'd love to see a link.

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