Siberian Mortgage
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.