Voluntary liens are a normal way to collateralize loans

From last week’s discussions, I want to clarify that not all liens are bad. Liens from non payment of loans can hurt your credit score, but liens that you take on voluntarily from a mortgage don’t have that effect, but they will still appear.

I see this as a key way of securing loans to finish any house that we own, including if we take loans from other citizens and neighbors and not through banks (although we should explore all options) or raise money online. If we were to crowdfund loans on our website, which I am working on, I believe there is no legal way to do it besides posting legal documentation of the lien beforehand .

Unlike other cryptocoins that create possibly unlimited digital assets out of very abstract value that can be hard to measure, we would issue a concrete and finite asset backed by the house, for a conservative valuation like 50% of the last sale price. For 3731 Northwestern St that means we would ask for a loan of half of $34,000, or $17,000, put a lien on the house, and offer strong legal guarantees to our investors and the neighborhood even if the house doesn’t get worked on and is sold as is right now. on top of that strong financial foundation, I’ll continue to work on the house to improve its resale value until it’s up to code or we run out of money. I wouldn’t be comfortable taking anyone’s money otherwise, and if we have surplus funds after selling the house in the future and want to sponsor other talented and ambitious building cooperatives, I would ask for the same voluntary liens on those houses as well.

That’s only my opinion on how to do things, interested in other opinions, including dissenting ones.