How Mortgage Policies Affect the Wealth of a Nation
A Luxury Americans Take for Granted
Herrick Mpuku spent a decade to build his home in Zambia, Africa. He financed the building of his home by saving up little by little. Michael Phillips writes in the Wall Street Journal about Herrick's and other Zambian's experiences saving up to build their home. Another Zambian, Humphrey Kapupula, took seven years to build his two-bedroom house. During that seven years, "he sold his Toyota and borrowed against his pension, [and] at times the family went without food to pay for buckets of cement." (Phillips 2007) Until recently, no home loans were available to Zambians. Those who could afford to paid cash for homes and those that could not built their home very slowly as they spent a little of each paycheck (when they could afford to) to purchase the supplies to build their home. Phillips cites a recent report by FinMark Trust, a U.K.-government financed research organization as reporting 0.1% of Zambians have a housing loan from a bank. (Phillips 2007) Phillips attributes the poverty and corruption in the Ministry of Lands as reasons why banks are so hesitant to lend mortgages. Interest rates for those who did borrow to own their home were as high as forty percent. (Phillips 2007)
The "American Dream"
As Americans living in the twenty-first century, it's easy to make the false assumption that owning a home is just as easy for one person to achieve as it is for another. Growing up in America, we're taught to believe that if you work hard and desire something enough, you can make it yours. Owning a home doesn't seem out of reach for any middle class American. ...