Two Op-Ed articles in today's edition of The New York Times propose radical changes to home mortgage financing.

In one, Alex Perriello proposes that borrowers and lenders share risks and in the other, Bethany McLean, the author, with Joe Nocera of The Times, of the recently published book, "All the Devils Are Here: The Hidden History of the Financial Crisis," suggests that 30-year mortages are

"Three years after the mortgage crisis began, there are still 11 million to 15 million homeowners who owe more than their home is worth, meaning that about 25 percent of all mortgage holders are underwater. As a result, foreclosures continue to mount; many homeowners can't make their payments and are tempted to simply walk away from their debt. Meanwhile, the lenders and investors who own the loans are unwilling to work out a deal if, as is usually the case, it means losing money," observed Mr. Perriello, the president and chief executive of a real estate franchise organization.

He argues that "there is a solution" and maintains that "rather than be at odds, homeowners and investors should partner in long-term equity-sharing arrangements."

"Here's how it would work. Let's say a homeowner purchased a house in 2004 for $300,000 with no money down, and the property is now worth $150,000 - a 50 percent drop in value. In an equity-sharing arrangement, the lender would write a new loan for $150,000, retire the original $300,000 loan and, to make up for that loss, take a 50 percent deeded ownership interest in the property. The homeowner would also agree to split 50 percent of the net proceeds of any future sale of the property with the lender. The new arrangement would also include a buyout provision...."

"Such a plan," Mr. Perriello continued, "would be relatively easy to put in place, assuming the lender held the loan in its own portfolio. In most cases, however, lenders immediately sold their loans to investors and merely performed loan-servicing duties like collecting monthly payments and sending statements. In those instances, the lender would have already made its money when the loan was originated, the proceeds from the new loan and the 50 percent deeded interest in the property would go to the investor, not the lender. The investor would also benefit from any future sale or when the homeowner exercised the buyout provision. Equity-sharing would be a boon for everyone involved. Homeowners could stay in their houses and preserve their credit (assuming they stay current on the new loan). The neighborhood would avoid a foreclosure, which can depress property values. And the lender or investor could participate in the upside potential when the house eventually sells. Best of all, it wouldn't cost taxpayers a dime."

Ms. McLean notes that "the federal government is in the housing market mainly because most banks simply won't issue mortgages that can't be guaranteed by Fannie, Freddie or the Federal Housing Administration" and that "a market without government support would almost certainly involve the demise (for most of middle-class America) of that populist favorite, the low-cost 30-year fixed-rate mortgage."

"For a homeowner," she continued, "a mortgage with a 30-year fixed rate (especially one that he can pay off early without a penalty) is a wonderful thing. For lenders and investors, however, it is a financial Frankenstein's monster, an unnatural product filled with the potential for losses. Absorbing some of the risk of those losses is a large part of what the government does in the housing market."

"Wouldn't a better solution be for banks and other financial institutions to offer mortgage products that they actually want to keep on their own books? Maybe these would take the form of 15-year mortgages with a rate that would be adjusted after five years so that the banks wouldn't have to worry about long-term interest-rate risk..."