BillCust

Proposal to Correct Resource Misallocation in the Housing/Lending Sector

Gibberish aside, the difficulty on its implementation, as Malkiel failed to explain, would be on preventing fraud. In other words, how can all the parties (bank/lender, borrower, marginal home buyers, gov't) somehow not further distort reality - so how would you get their interest aligned?

The borrower wants the highest possible selling price, ok. The banks too. The government is neutralized in your scheme by legislation. And the rest of the power balance is the marginal home buyer, who wants the lowest possible price. It could theoretically work if this balance holds. Chances are, they don't - or they still take more than one year, as you said, to balance themselves out. Plenty of risk in your strategy but I trust your logic.