One of the comebacks to "Mortgages are evil" is that without mortgages most people couldn't afford a house.
And today, most people cannot afford a house. Even the one they are paying for right now.
Mortgages Create a Bidding War
As with all other facets of fractional reserve lending, the earlier the participant, the richer the person got.
And this is true with housing. The first mortgages for houses were SHORT, like five years, with a balloon payment. And these people got into houses that they couldn't afford without a loan. The next group got longer loans, and so paid more for the same houses. And so the bidding war continued.
Today, the children of the children of the first generation into this mess cannot afford a house. And they cannot afford a house because the have to outbid EVERYONE that came before them. Unfortunately we have hit the hockystick part of the graph. There is no lower interest rates, there is no longer mortgage terms that will be meaningful to the banks. The debt is too high to make more debt on the same houses.
Since we live in a capitalistic environment (where you buy and sell property) then a person will spend the most that they can on a property. The amount of house that they can afford is how much of a monthly payment they can afford. Or, basically, the person goes to the limit of their earnings.
And if each person goes to their limit, then housing ratchets up to cost ALL of the people's income.
This cycle only breaks when the supply of houses exceeds the demand for houses.
All this money goes to the banks.
So, after bidding all of your available money, you now have a house. And all of your money now goes to the bank.
Or, basically, the banking system has worked out how to fleece people of all of their available blood, sweat and tears.
Think about it. A good portion of your paycheck goes to pay taxes (which are burnt as offering to the god of money) and then a large portion of what is left goes to the banks (of which, the principal portion destroys the money that was created to make the loan)
So, a really BIG part of your paycheck does not help anything, build anything, it is just the cost of keeping the debt based fiat currency in existence.
Did you ever think of that? That a really BIG part of your paycheck just goes poof. Up in smoke, to titillate the nose of the god of money. Really think of that. Like, 25 our of 40 hours a week just goes to the banking system (not the banks, just the loop that keeps the fiat currency in existence)
When the ATMs stop working
There will be a point where the banks won't or can't give out money. You go to the ATMs and they give nothing, or a maximum of $50 a day. And people, trying to continue their "normal" lives, go and get as much cash (the paper stuff) together to give to pay their mortgages. Or, essentially throwing what little cash we have left away.
When the banks cannot give out the money that they are holding for their customers, then they should also not be collecting mortgage payments. But, being banksters, they will demand the mortgage payments and threaten legal action.
What is worse, is that inside these mortgage contracts, there are all kinds of triggers that happen if you miss a payment. And it doesn't matter if the banking system caused it.
They will try to use this to squeeze more money out of people, or just take all the houses, and rent them back to the people.
However, like i said above, this works until their is an excess amount of houses on the market. And then things work the opposite way. The amount someone will pay for a house ratchets down. Even if that house's price is less than the cost of building that house. (The reality is that house prices should go down over time, as the useful life of the house goes down.)
And this will be the beginning of the end for banks.
Instead of being like 2008 where we bailed out the banks, this time there is going to be bail ins.
Unfortunately, (for the banksters) this comes with a horde of angry people demanding their money. In other countries where this happened, people took bank presidents hostage and demanded their money.
And this time, people will start to recognize that this was ALL a bankster plot. That the system was designed to rip off the people. That all of this pain and suffering was caused by the banksters, as the banksters played both sides. The banksters are the Rock AND the Hard Place.
There is going to be a LOT of anger towards the banksters, and the bankster classes. The next "Occupy Wall Street" will have pitchforks and torches.
Fortunately, bitcoin allows you to be your own bank. And so, this collapse of trust for banks and banksters will have a way out, a resolution to get out of the bankster system.
And this will be the end of mortgages.