Reforming the Residential Mortgage Market

by A. Schaaf



The article presents information about the reformation of the residential mortgage market. For almost a half century the residential mortgage market has been a favorite arena for change and reform. Following establishment of the Federal Home. Loan Bank System during the Hoover administration, specific actions reached high tide in the New Deal years with the Federal Savings and Loan Insurance Corporation, Federal Housing Administration and Federal National Mortgage Association, these agencies have endured to the present and have greatly affected the structure of the residential mortgage market, its position in the nation's money markets, the investment characteristics of the mortgages and the economics of home ownership. Despite the far-reaching changes of 1930s, proposals for change have continued throughout the postwar years. Proposals to change the method of borrower repayment of the mortgage away from the fixed-rate, level-payment, fully amortized system typically used today. The most widely discussed such change would be the shift to the variable-rate mortgage. Proposals to change several of the regulations controlling residential mortgage lenders. Included here are proposals to change the type of loans these lenders make, the deposit rates they can pay and ways in which they are affected by federal income taxation.

California Management Review

Berkeley-Haas's Premier Management Journal

Published at Berkeley Haas for more than sixty years, California Management Review seeks to share knowledge that challenges convention and shows a better way of doing business.

Learn more
Follow Us