ABSTRACT
The mortgage concept is an ancient one. “Private financing of homes first began in China more than 5000 years ago.” 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. In England, references to mortgages have been found as far back as 1190. Modern mortgage lenders trace their history to the development of “friendly” societies in the 1600s in the British Midlands. Spinning off from the friendly society movement were building societies that first appeared in Birmingham in 1781. In 1723, New Jersey issued “bank” currency that could be used as mortgages on real estate and silver plate. In the 1920s real estate bonds issued by investment banking firms funded commercial real estate developments. The commercial real estate bond market had also become a viable mechanism for investors to make investments in commercial real estate mortgages.
