The History of Credit in America

The United States is a nation built on credit, both public and private. This article focuses on private credit: that is, credit extended to businesses and consumers by private entities such as banks, other businesses, and retail stores. Business credit involves short-term lending for items such as inventories, payroll, and the like; and long-term lending for the building of factories, offices, and other physical plant. Trade credit, bank loans, bonds, and commercial paper are all forms of business credit. Consumer credit is extended to individuals or households to fund purchases ranging from basic necessities to homes. Informal store credits, installment sales, personal loans from banks and other institutions, credit cards, home mortgages, and student loans are forms of consumer credit. Until the 20th century, the federal government remained mostly uninvolved in the private credit markets. Then, after World War I and especially during the Great Depression, the government deliberately expanded the credit available for certain targeted groups, such as farmers and home buyers. After World War II the government helped to expand lending even further, this time to small businesses and students. Mostly the government accomplished its goal not through lending directly but by insuring the loans made by private entities, thereby encouraging them to make more loans. In the case of home mortgages and student loans, the government took the lead in creating a national market for securitized debt—debt that is turned into securities, such as bonds, and offered to investors—through the establishment of government-sponsored enterprises, nicknamed Fannie Mae (1938), Ginnie Mae (1968), Freddie Mac (1970), and Sallie Mae (1972). Innovations such as these by businesses and government made credit increasingly available to ordinary people, whose attitudes toward borrowing changed accordingly.

Study of the legal basis of housing mortgage

In the Bulgakov´s novel, "Master and Margarita", it is said that people are spoilt by the housing problem. But, probably, and in today´s society it is more than ever, and for most Russians the housing problem remains a major issue. Contrary to popular belief about the novelty of the mortgage, it has been around for a long time, since the time of the Archon Solon, who lived in the VI BC. But in Russia, the first mention of the so-called "mortgage" is dated XIII century. In XVIII-XIX centuries under Catherine II and Alexander II mortgage loans were most actively developed. However, at the beginning of the XX century, after the October Revolution of 1917, the concept of "mortgage" gradually disappeared from everyday life and considered as a "bourgeois phenomenon". The origin of the "new" Russian mortgage started in the early 90s of the twentieth century, but only by 2000, there have been real positive conditions and trends of its development. Mortgage as a form of solution of housing problem is widely discussed by legislators, society and the media. It is difficult to find legal or economic magazine or newspaper, which had not raised the issue of mortgage and related numerous problems. It happens that the opinions of authors on various issues differ, but one thing they are in agreement – it is necessary to develop the mortgage. The article deals with current issues of lending to households and features of home mortgages.

Algebra, Home Mortgages, and Recessions

The 2008–2009 U.S. economic crisis stimulated this exploration of the algebra of mortgages, the bubble in house prices, and how to reduce foreclosure rates.