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CPI-tied mortgage idea picked up from church

Last year the Utah State Retirement System borrowed an idea from the Mormon church: invest pension funds in home mortgages with the interest rates pegged to inflation.

So far, about 300 homes have been sold with the inflation-sensitive mortgages. The state has set aside $20 million for the experiment, and may add another $30 million. The church, which learned about the idea from high-inflation South American countries, has only a modest program.

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But the recent rapid drop in inflation, plus the complexity of the idea to home buyers, has not made the program very popular. ''It hasn't gone as well as we thought,'' says a church official.

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