An idea on term loans in the sandbox

The pit boss needs to minimize 'time to completion' error. Let's due housing:




We need a pool of home buyers who make that error about the same rate. We also know the housing cycle is about 8-10 year, so we want home borrowers to make 8-10 years loans, overlapping them if need be. A standard S/L done in chunks of 8-10 years. The pit boss will rarely do interest swaps.

Savers, with high deposits, save for a down payment. Deposits bet the mortgages. First ttme buyers manage their L/S as they buy their starter home. It is as if we took a standard asynchronous S/L and ran the clock speed way down, or maybe just raised the look fee, the fee for scanning the board, ran that way up. Points, high entry fees? I want to force long time outlooks.

I am trying to avoid the third color, time insurance. I want to shift that fee into the interest swaps, make it fairly shared between loans and deposits.  One simple solution is to merge S/L with  a regional realtor and normalize all the listings by risk. So, take Zliiow. Just add a regional trading pit for the houses from the risk adjusted pool. A standard S/L with 'liquid; houses, liquid in the sense they are closed to the S/L customer list. So the saver buys from the pool, in a fair trade. There should be no arbitrage, in theory, between the universal house.deposit/loan trade. A combined pricing system, the house trades liquidity across the S and L trees.

Everything risk adjusted, it is all done from a single contact. Home remain in the pool, acting as collateral, bankruptcies sold right back into he pool. Here the banker makes money with a close association of house refurbishing service. All the houses can meet a standard condition, further search and inspection redundancies removed.

SecureID is not really needed, these are ten year contracts, and the banker will be knocking on human doors. But all sandbox rules should still apply. The system is a Case reduction transaction fees, a Baumol minimization of the value tree, and make a Nash equilibrium true with risk adjustment.

The mechanics would be to down load he redneck Trading systems package and adapt it to real assets. But I sold the jewel of my empire for a song and dance, an the VCs would never trust me again.

And his is real people, not bots. We have automated and merged services and accounts, bypassing some links in the double entry tree; but those links were services, housework, frankly. The minimal path make that a banker service. Then the bank is also a legal escrow, we use government property ledgers. Write the Corporation management manual and franchise the operation.  More banker jobs, not fewer; but they have to manage service flow. Hosing becomes more liquid, we kind of merge lease with buy, the entry contract is long term, the S/L/Home users signs on for ten years.

I need to expose the time to completion bets, and close that within the pits. But it is a great productivity enhancer, it automates a great deal of the housing industry. Most of us would join one, like a well done credit union, and stay there as long as we live in the region. I delivers on the promise, home ownership. You will own one within time, or living in a nicer apartment while saving.

Triple entry accounting:

The service client performs triple entry accounting, deposits, loans and home value/rental value.  Effectively, all are handled in the S/L pit, except the pi boss has to rebalance collateral, and extra step. There is no monetary arbitrage, there is a human service arbitrage; all the transaction costs in the loop were agglomerated unto one entity, a franchise offering banking, real estate, home insurance, escrow, and property maintenance. Touchstones in the contract.

The home budget has a decision, it can swap home collateral for a car, skip the car and lend out money, or borrow for a lawn mower.  But the assumption is all members have an equal desire to remain in the regional network, and be normally housed with a job. The members should be buying a five year certificate of deposit upon entering.  Call i the homeowners credit union, but renting and saving still meets risk equalization.

Jumping across franchises

A client see an arbitrage moment to sell here and join another of the franchises there.  This arbitrage is real, the two housing markets adapt differently.  Bankers can charge a churn fee for that, help pay the run risk.  The central entity for each franchise is a fee for service provider. Plus, it akes a lot of the ad market for local housing.

Deal flow:

Once a client joins the Home Cedit Union, all his particulars are known to th central authorities, all contract have fees for reversals, as is standard. So, internally, houes becomes very liquid, internal property assignments close in a few days. here is the external call to the county property ledger and recordings.  Mortgage insurance is held inside the pool since many houses trade internal to the pool.  inspections become uniform.