Blaedlond, not Mortgage
Yet creditors require some collateral to make good their credit, and even a free man may need credit from time to time. In the modern world, where all allodial land has been cast aside (although remaining as an inalienable right to be reclaimed under the 9th Amendment), people may need credit to buy a house and some land. And even those few who own their house and/or land outright may need credit from time to time. College costs a lot of money these days!
The mortgage relationship places the entire property in jeopardy. From a heathen perspective, mortgage is not logical, because it endangers the very existence of the home estate, while placing undue burden on those attempting to pay off the mortgage. As anyone knows who opens their eyes these days, mortgages have gotten many of us into a great deal of trouble.
I propose instead an institution I will call "Blaedlond", meaning Fruit-Land, as an alternative to this mess, that preserves the family home-estate while at the same time satisfying creditors. This concept and instititution, which I am giving the neologism "Blaedlond", is not without precedent in the history of European property law.
The idea would be for every household to set aside an area of land as Creditor's Land, and it would be this land that would become the basis of the collateral for creditors. But it would not be the land itself, but its fruits that would be pledged to creditors.
Thus, for example, one might pledge the fruits of one's front lawn to creditors in exchange for a loan. If, for some reason, you could, despite your best efforts, not make good on paying back the loan, the creditors could seize usage of the Blaed-lond (in this case your front yard), taking possession of all its fruits, until such time as the sale of those fruits paid back the full amount of the loan. In other words, the Blaed-lond would represent an Alienable Usufruct for Creditors. Creditors would be unable to seize ownership of the land, but they could alienate its fruits for as long as it took to pay back the loan. They could plant cash-crops there, for instance, like tobacco, or cotton, or coffee, or what have you, and could hold the usage of the land and its fruits potentially for decades or even generations, but once the debt is paid, the Usufruct of the Blaed-londs would return to the owners of the estate. If the owners of the property decided to sell their house and land in the meantime, the Blaed-lond would remain in hock, lessening the selling value of the estate. New owners wouldn't be able to use their front lawn, plant gardens there, or utilize the Blaed-londs as collateral for any loans they would want to make, and thus, unredeemed Blaed-londs would discourage selling of a house until such time as the loan was paid off.
This institution would make good sense for both creditors and debtors, without endangering home ownership, which is the basis of a stable society. From a heathen perspective, land should be held over the generations. Yet we all know that credit is needed at times, even for self-sufficient farms. It is logical to create a way to establish collateral for credit without at the same time establishing the foundations for bankruptcy and foreclosure. The mortgage institution has given too much power to creditors, while at the same time, such power has gone unchallenged for far too long. Creditors must be given their fair due, which is substantial collateral to guarantee the repayment of their loans. Blaed-lond, if adopted as an institutional practice by modern folk, could open up a new niche for agriculturally-savvy creditors, who could offer to take up the Blaed-lond and cultivate it for a given number of years in exchange for paying off the loan. Whomever possessed the Usufruct rights of the Blaed-lond would pocket all of the profits made off of its cultivation.
Alternatives to the mortgage-institution are desperately needed in the modern world. The precedents to solutions lie in the institutions of our ancestors, for whom pledges of foreclosure (which is what mortgages amount to) would have been seen as abominable. Keep the land in the family, and pay off the creditors with the usufruct of a subdivision. Over time, there is enough to go around for everybody without having to alienate the family from its homeland and create broken patterns of bankruptcy and foreclosure, which have a devastating effect on society.
A variation of Blaed-lond, especially in urban areas where the home has little extra land-space, would be to pledge one's garage as collateral. If a loan went to the "foreclosure" stage, the usufruct of the garage would be foreclosed until such time as the debt was paid. In this special case, the creditors would have the right to clear the garage of all materials (which you would then have to find another space for), and retrofit it to become a locked Storage Facility which could rent at a couple of hundred dollars per month. If the garage could be rented for $250 a month, that's somewhere between 1/5 to 1/10 of a monthly mortgage/loan payment. Assuming that in the first year of a 30 year loan one was unable to keep paying, and that one never made another payment after that (which is an absurd suggestion, as every half-responsible person or family is going to make some effort at repaying, if for nothing else than the reclamation of the alienated garage-space), then even under these conditions, the garage could end up staying in hock anywhere from five to ten generations --- assuming that no other payments were ever made on it. (In such a family home, for the grandchildren and great-grandchildren, the garage would never have seemed theirs, but always belonging to the bank, and the strange people who come by every so often with their key to check in to their storage unit.) The inconvenience of not having garage-space, not to mention having anonymous strangers entering the property at will to gain access to their storage units, would be motivation enough to get payments to the creditor! Under most circumstances, people might have their garages alienated for a series of months, until they got back onto their feet.
In short, Blaed-lond could be one step towards securing home-estates back into the foundation of odal that was the pride of our ancestors' freedom, and the basis of a stable society.