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Word Translation?

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Barry Ritholtz at The Big Picture blog has a post on the root meaning of the word mortgage. Literally, its a “dead pledge.”

Reading further into his post, if you understand what a mortgage is as an instrument in which a home is collateral and when you default, the lender takes the home (and whatever money you paid to that point), the definition is exactly what it should be.

Actually, this is an exercise that shows the importance of knowing what exactly you are investing in. Many people didn’t do that throughout this crisis, and they got taken for what they’re worth.


Written by walonline

July 26, 2008 at 2:19 pm

Posted in The Web

Tagged with , ,

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