Everywhere in the World, Governments Heavily Regulate the Home Mortgage Business

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Yesterday I wrote about problems with the mortgage finance market, which are mostly due to the fact that private lenders aren’t interested in funding 30-year fixed-rate mortgages on their own. There’s just too much risk. This means that if we want the mortgage market to revive, Fannie Mae and Freddie Mac need to start guaranteeing these mortgages again in the same volumes they used to.

One obvious response to this is that the 30-year fixed mortgage wasn’t handed down on stone tablets from Mt. Sinai. It was an invention of the New Deal. Other countries get by just fine without them, and so can we. We should just get the government out of the mortgage market entirely and let banks make whatever kinds of loans they want.

We could do that. But it’s well to keep in mind that although other countries might not have outfits like Fannie Mae and Freddie Mac, they do have plenty of government regulation of the mortgage loan market. If you’re curious about how mortgages work outside the US, Michael Hiltzik provides a useful rundown of Canada here. Other countries work differently, but the principle is the same: there’s always supervision of some kind. Getting rid of Fannie and Freddie is a defensible option, but that doesn’t mean you’re getting rid of government regulation. You’ll just end up with different government regulation.

We've never been very good at being conservative.

And usually, that serves us well in doing the ambitious, hard-hitting journalism that you turn to Mother Jones for. But it also means we can't afford to come up short when it comes to scratching together the funds it takes to keep our team firing on all cylinders, and the truth is, we finished our budgeting cycle on June 30 about $100,000 short of our online goal.

This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

payment methods

We've never been very good at being conservative.

And usually, that serves us well in doing the ambitious, hard-hitting journalism that you turn to Mother Jones for. But it also means we can't afford to come up short when it comes to scratching together the funds it takes to keep our team firing on all cylinders, and the truth is, we finished our budgeting cycle on June 30 about $100,000 short of our online goal.

This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate