ABSTRACT
Historically, various federal agencies have sought to help mortgage markets by smoothing the interest-rate cycle, underpricing deposit-insurance guarantees for maturity and credit risk undertaken by specialized mortgage lenders, imposing housing-related deposit-rate ceilings and asset restrictions on thrift institutions, guaranteeing cash flows on mortgage instruments, and subsidizing interest rates on mortgage loans for low-income housing. During the last decade, technological change in the methods used to produce and distribute credit in US mortgage markets has been both extraordinarily rapid and extraordinarily wide-ranging. Innovations have occurred in the rights and duties incorporated into mortgage contracts, in direct and indirect opportunities for taking and unwinding positions in these contracts, and in the activities undertaken by contracting parties and their agents in arranging deals. During the early 1980s, partly because of pressure from deposit-insurance agencies, adjustable-rate home loans have begun to push fixed-rate loans into the background.
