Exploring the (Latin) Roots of Our Mortgage Problems
I am a national statistic. Three years ago, I decided to move. I found a new house, borrowed some money to make a down payment and then, after looking at the comparable sales figures from the months before, came up with a nice, profitable number on the house I was living in. With great excitement for my profits to come (I was downscaling), I put a “for sale” sign on the curb. That was in March, 2006.That bright green and yellow “for sale” sign, I have narcissistically deduced, brought about the housing downturn. That spring, for the first time anyone could remember, people in my town could not sell their houses.Three years later, the stubborn title for the house remains in my name. I have put it on and off the market, rented it, and put it back on the market (where you can now grab it for 1970s prices!) For three years, then, I have paid two mortgages: one on the old house, one on the new. The only good financial news I have received in ages came this week, when I learned the county lowered the taxes on my new house to reflect its declining value.Given this “I’m in the same boat” story, you will not be surprised that I have a word stuck in my head. Some of us have pop ditties banging about up there. Me, I have one damned word rattling around, careening off various cortices, in the morning when I awake and worry, at breakfast when I read the newspaper, at work while doing internet research, and at night while checking my balances, mental and financial.Mortgage. That’s the damned word. Mortgage mortgage mortgage mortgage mortgage.Think about it enough and you, like me, may start wondering: what the f*$@k does that word mean, anyway? Where does it come from?Turns out mortgages are an English invention, and references to them go back to the 12th century. English common law held that a creditor could hold an interest in a debtor’s property and retain the title.But why would the Anglo-Saxons come up with that odd-sounding term to describe such a transaction?”Mort” comes from the Latin for “dead” and “gage” from the Latin for “pledge.” So a mortgage is a “dead pledge.” It’s dead in two ways: the property is “dead” to the creditor once the debtor paid off the loan, and, if the loan is not paid off, the property was “dead” to the creditor.Sir Edward Coke, a 16th century English jurist, explained the etymology of the word thusly:”It seemeth that the cause why it is called mortgage is, for that it is doubtful whether the Feoffor will pay at the day limited such summe or not, & if he doth not pay, then the Land which is put in pledge upon condition for the payment of the money, is taken from him for ever, and so dead to him vpon condition, &c. And if he doth pay the money, then the pledge is dead as to the Tenant, &c.”The mortgage was exported to the United States, but until the 20th century, you usually needed close to a 50% down payment to qualify for one. FDR-yes, here we go again with the parallels-helped make home ownership affordable for more Americans when he established the FHA (Federal Housing Authority). The FHA insured lenders against defaulting borrowers, as well as regulating the banking industry. With more protection, bankers were wiling willing to take more risks. The FHA also instituted the 30-year-fixed-rate loan.And still we kept that pesky word, mortgage. The American dream of upward mobility is based upon dead pledges. Put this way sounds so sad, so unethical, and consonant with the way many of us feel today about our finances (dead) and our bankers (unethical).Funny what a word can do. Imagine if we were going around all day reading reports about the “dead pledge” crisis. Translating those Latin roots makes our individual and national crises seem even more rank, more diseased.Tomorrow, when I wake up worried about my two payments, the one on the house I cannot sell and the one I live in, I will translate. I will ask myself: “How will I pay my dead pledges?” Removing “mortgage” from my head will, I suspect, make another word seem less scary, more benign: foreclosure.
