chapter  7
46 Pages

The Mortgage Market

The mortgage concept is an ancient one. “Private financing of homes first began in China more than 5000 years ago.”1 Loans that were collateralized by mortgages on real property were also made as early as the fifth century B.C.E. in Athens. In the Middle East, “antichretic” loans, which allowed the lender to take possession of the rents of a property in exchange for the loan, were used for real estate.2 Historians have also discovered that the law of ancient Attica recognized loans that involved a pledge of property, without the lender’s taking possession. Such arrangements required the erection of a pillar or tablet on the property that inscribed the creditor’s name and the amount of the debt.3