Tell me why this wouldn't work

[jeriendhal]

Scenario: I win the Mega Millions, bigtime. The full $350 million, taken as a lump sum of say $250 million after taxes. Subtract another $50 million to pay for my dream house, every video game and toy I ever wanted, and trust funds for Georgia and Thomas so they never have to work a day in their lives if they live with reasonable care.

Take the remaining $200 million and divide it so:

$100 million would be used as interest free loans. No interest. At all. First come, first serve, limited to loans of $100,000 or less so it doesn't dissapear into the housing market. Length of time to pay is negotiable depending on the amount, but the loan recipient must put up at least 50% loan guarantees in the form of cash or physical assets. The catch is they will treated like any ordinary loan recipient if they default, and that the money is lmited pool. Once it's all given away, you'd have to go on a waiting list to recieve a loan as previous recipients pay their debts.

The other $100 million is held in conservative, long term investments. Profits from which go to pay for overhead such as loan officer salaries, advertising, ect. Any leftover profits at the end of the fiscal year are plowed into the loan fund to increase it.


So did I just reinvent someone's wheel, or have I just raised the ire of every Congressman who gets contributions from the loan industry?

Comments

[selenite.livejournal.com]

You've got a bank whose stockholder doesn't want to make a profit. You'd still have overhead complying with all the regulations for banking. People with assets equal to 50% of their loan won't have that much trouble getting reasonably low interest. You'd have to convince them it's not a scam to set up an excuse to foreclose on them. And make sure your employees don't do that to improve their numbers.

Legal as a private business/non-profit. If you sold stock the SEC would stomp you for not making profits for the shareholders.

[jeriendhal.livejournal.com]

Stocks wouldn't be involved at all. This would be a non-profit business, since there would be no interest. And hiring agents would be tricky since they would be working just for salary, no bonuses for signing on heaps of customers, because I wouldn't want them to have an excuse to cook their numbers (in other words I'd need saints)