Siberian Mortgage

Author: Kim Vedros

There is so much that we take for granted in the good old USA. Take mortgages for example. I'm on my third home here in the Deep South. My wife and I have had three mortgages for our homes. If your credit is decent and you have something to put down, then you're likely to be able to afford a home. Contrast that with many other countries in the world. This fact became salient to me last year when I had the opportunity to visit Siberia.

Now when I say the name Siberia, I'm sure that many ideas formulate in your mind. We were there in January and, yes, it was very cold. The temperature averaged about -35C. We were in a city of about a million. Yes, there are cities that big in Siberia -Novoskuznetsk to be precise. As one drives through any part of Russia, one of the prominent features of the landscape is the high rise ""flats"" in which most the population lives. You know what flats are right? These are the multi-storied buildings that resemble low income housing in America. I suspect that many were built in the 1960's.

Our party had the distinct privilege of visiting a young Russian family in one of these flats. After the five course meal that was served - Russians are very gracious - I asked the young man of the home through our translator, ""Do you own this flat or do you rent it?"" Oleg our Russian friend said, ""We own it."" I then asked Oleg, ""Do you have a mortgage or do you own it outright?"" Oleg explains to me that the company he works for bought it. The mortgage payment is drawn from his paycheck by his construction company. The government mandates that they cannot fire him and he cannot quit until the mortgage is paid. Now I thought this was indeed a unique arrangement. Unlike the way we do things here in the US, there was no bank involved.

This, in fact, agreed with a conversation I had with an American friend some time back. My friend worked with the United Nations World Bank. His job was to travel and teach Western banking practices in developing countries. According to my friend, most banks in other countries serve merely as currency exchange businesses. They do not lend money at all. They basically make a percentage of every currency exchange transaction that they make. Forget about checking accounts. Oleg, our new Russian friend, was one of the fortunate ones. He worked for a company large enough to purchase his flat and hold the mortgage on it. The question is, ""What about everyone else?"" How do you mange to own a home if you do not work for an employer large enough to hold the mortgage. Visiting other parts of the world can give you a serious reality check. This is certainly true in the world of banking and mortgages. Since my visit, I have tried to be more appreciative of how good we have it in the USA.

About the author: Kim Vedros is the owner of www.loans-4-home.com an informational resource for borrowers.